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sr-111312-7c cont'd to 111412 (2)ID ® City of Santa Monica° To: City Council City Council Report City Council Meeting: November 13, 2012 Agenda Item: _' ° C— From: David Martin, Director of Planning and Community Development Subject: Development Agreement 07 -005 and Tentative Tract Map 12 -001 to allow a mixed -use project consisting of 377 residential units (161 apartments and 216 condominiums), up to 24,940 square feet of ground floor neighborhood - serving retail of which up to 4,250 square feet could be converted to production space at 2930 Colorado Avenue. Recommended Action Staff recommends that the City Council: • Certify the Final Environmental Impact Report prepared for the project in accordance with CEQA; • Adopt a Resolution adopting the Mitigation Monitoring Program and Statement of Overriding Conditions for the project; • Review the Tenant Impact Report on the impact of the closure and conversion of the Village Trailer Park; • Introduce for first reading an ordinance which approves the proposed Development Agreement, including the Tentative Tract Map and Tenant Relocation Plan; and • Authorize the budget changes as outlined in the Financial Impact and Budget Actions sections of this report. Executive Summary The City Council held a public hearing on the proposed project on July 24, 2012. At that meeting, the City Council continued the hearing with direction to the applicant to explore the alternate site plan presented by Ron Goldman, a public speaker, ( "Goldman alternative ") and for staff to address a number of key questions regarding the project. As previously expressed in public testimony, however, the applicant has already considered and rejected the Goldman alternative and associated Resident Owned Parks ( "ROP ") proposal since, among other things, the Goldman alternative would require the property owner to sell the amount of property (roughly half of the project site) that would accommodate 56 trailer spaces for approximately $1.5M. Instead, in response to the Council's previous deliberations, the applicant has proposed a partial closure of the Village Trailer Park resulting in the retention of 10 spaces on the eastern edge of the park (the "Residual Parcel ") and the closure of 99 trailer spaces. The applicant has agreed to upgrade the retained park, deed restrict the underlying land for 1 future affordable housing, and transfer the retained park to the City or its designee at no cost. This significant change to the project by the applicant not only ensures the retention of a portion of the park for existing residents but also guarantees its future use for affordable housing. While the relocation plan still consists of the same 7 possible options for displaced VTP residents to select, Options #1 and #6 have been enhanced by new proposals by the developer. The retention of 10 trailer spaces provides another avenue for VTP residents who may wish to negotiate separate agreements with the developer on moving to available spaces at the retained park. Further, the developer has agreed to purchase, install, and transfer title to VTP residents new manufactured homes at Mountain View Mobilehome Park that are architecturally similar to those that were previously approved for Mountain View by the Architectural Review Board. In a separate action, staff is also requesting that City Council authorize staff to use available funding from the TORCA Housing Trust Fund to be used to provide VTP residents who choose to move to Mountain View the opportunity to sell their manufactured homes to the City at a fixed price of $30,000 and become a renter at MVMHP within six months of moving in. This is an option that staff is recommending based on recent experience with existing Mountain View residents, who chose to become renters despite being presented with an opportunity to own through a financing program. Compared to the project last reviewed by the City Council on July 24, 2012, the revised project includes a reduction in the number of residential units from 438 to 377 and a reduction in total floor area from 378,450 sf to 341,290 sf. The type of units has been improved with the project split fairly evenly between condominiums and apartments. The mix of rental units has also improved significantly with studios making up a lesser percentage of the rental units and an increase in the number of 2- bedroom and 3- bedroom units, which has increased the average unit size in the project to 839 square feet. The project's 16 affordable units also consist entirely of extremely low or very low income units. The revised project would be constructed within three new buildings, instead of the four previously proposed, which represents a 14% reduction in the number of residential units and an 8% reduction in total floor area compared to the project that was presented to the City Council on July 24, 2012. The project revision involving retention of 10 existing trailers has presented some new considerations, including recirculating the Final EIR for new Shade and Shadow impacts analysis of the project on the remaining trailers in the retained park, understanding the obligations of the property owner with respect to temporarily operating the retained park until the land is donated, and revisions to the relocation plan. The revised project plans and revised tract map are attached to this report. The following is a summary of the key issues and questions raised by the City Council that remain pertinent in light of the proposed project changes made by the applicant in August 2012, and that are addressed in this staff report: Study the Goldman alternative and associated ROP proposal to purchase and operate a portion of the existing Village Trailer Park 4 • Address Planning Commissioner testimony that project revisions have not adequately addressed Planning Commission's recommendations (implication that 3% reduction in floor area was not sufficient) • Explain rationale for basing land value in the project's economic analyses on market value (approximately $22M) instead of purchase price (public testimony included claims of purchase price of approximately $5M) • Consider potential use of proceeds from sale of 1920 Ocean Way for purchase of Village Trailer Park or portion thereof • Explain rationale for the project proceeding ahead of the completion of the Bergamot Area Plan • Respond to key issues raised in the Legal Aid Foundation of Los Angeles ( "LAFLA ") letter submitted on July 23, 2012, namely, developer demonstrating possession of property before development and adjustments to language Sections 5.6.1 and 5.6.4 of the DA to clarify that the City is not participating in termination of tenancies at the Park • Clarify how unbundled parking is managed, designed, and would operate in the project A portion of the Final EIR was recirculated for public review on August 31, 2012 for a 45 -day public review period. The recirculated portions of the Final EIR, public comments, and staff responses to comments received on the recirculated portions are attached to this report. Also attached to this supplemental report is a revised development agreement that reflects the revised project and relocation plan (Exhibit K). Discussion Background As described in more detail on Page 39 -41 of the July 24, 2012 City Council report, since City Council approved a Memorandum of Understanding on November 27, 2007, the developer has pursued negotiations for a development agreement that satisfies the City Charter requirements for a rent control removal permit. The MOU's tolling provision is subject to termination upon 30 days written notice, at which point the remaining balance of the notice period (114 days) would resume. The City Council held discussions in December 2011 to explore means whereby the City could balance the needs of the Owner, protect the Village Trailer Park residents, including maintaining the existing affordable housing, while assuring that all of the City's own options with respect to ongoing processes are preserved. The conclusion of those discussions resulted in City Council directing staff to inquire whether the park owner would have interest in selling the park. The park owner was not interested and, therefore, the City did not further pursue acquisition. Over multiple Planning Commission and City Council 3 hearings for the project, the Goldman alternative and ROP proposal was put forth, which relied on approximately half of the park being retained and sold for $1.5M while the other half would be available for redevelopment. In public testimony, the developer has indicated that the Goldman alternative and ROP proposal are not feasible and without a willing seller or property owner participation in those proposals, neither are viable. State law allows an owner of a mobile home park to go out of the mobile home business. See Keh v. Walters (1997) 55 Cal.AppAth 1522, 1532 -1533. The City's R- MH (residential mobile home park) zoning for the site does not prevent the owner from closing the park. Indeed, current LUCE Policy D24.13, which continues a general plan policy first adopted and made applicable to the site in 1984, acknowledges that the Village Trailer Park may be converted to other uses as follows: "Retain the Village Trailer Park to the extent feasible, and permit recycling to other uses that are consistent with the MUCD and in compliance with the City's Rent Control Charter Amendment and sections of the California Government Code applicable to recycling mobilehome parks." LUCE Policy D24.13 is consistent with governing State law authorizing the conversion of a mobile home park, which also identifies the City Council as the legislative body responsible under State law for ensuring compliance with the requirements of Government Code §65863.7 and §65863.8 for a mobilehome park conversion, closure or cessation, and the "change of use" provisions for termination of tenancies under Civil Code §798.56(g) and (h). In Yee v. City of Escondido (1992) 503 U.S. 519, 528, the United States Supreme Court recognized that "the (California) Mobilehome Residency Law provides that a park owner who wishes to change the use of his land may evict his tenants, albeit with 6 or 12 months notice. Cal.Civ.Code Ann. § 798.56(g)." In rejecting the park owners' claim that California's statutory procedure for changing the use of a mobile home park is in practice "a kind of gauntlet" that prevented them from changing the use of their land and forced them to suffer the unwanted physical presence of tenants amounting to a physical taking, the Court held that because the owners had not gone through the park 4 closure procedure, the court would not consider that claim. However, it warned: "A different case would be presented were the statute, on its face or as applied, to compel a landowner over objection to rent his property or to refrain in perpetuity from terminating a tenancy." As stated in the Information Item provided to the City Council at its November 22, 2011 meeting, this warning from the Supreme Court means that if a city attempted to go farther than the state has gone to protect mobile home park residents against the impacts of park closure or conversion, the city could potentially be subjected to legal liability for "taking" the park owner's property. Response to Council Comments Project Revisions — Goldman Alternative and Planning Commission Recommendations The project and number of residential units has been reduced due to the removal of one building from the project and retaining 10 trailer spaces in the Residual Parcel. The applicant considered, but rejected the proposal presented by the Goldman alternative. A critical factor in the Goldman alternative is that the property owner must be willing to sell the amount of property (roughly half of the project site) that would accommodate 56 trailer spaces for approximately $1.5M. The property owner testified during the prior project hearings that the Goldman alternative is not a feasible project. The ability to sell and transfer property is a fundamental aspect of property ownership, and the City cannot compel a property owner to sell or dispose of their property. Therefore, without a willing seller, the Goldman alternative is not a viable proposal. Nonetheless, in response to the spirit and intent of Council's direction, the developer has instead proposed to retain the portion of the park on a separate existing legal parcel that has frontage on Stanford Street (the "Residual Parcel "), which would ultimately allow 10 trailer spaces to remain after development of the proposed Pennsylvania Avenue extension. Additional detail regarding the continued operation of the retained park, infrastructure upgrades to the retained park, timing and filing of the affordable housing deed restriction and transfer of the Residual Parcel to the City or its designee is provided later in this report. 5 With respect to the project design, the project now consists of 377 total units with 216 condominiums and 161 apartment units and is a reduction from the previously proposed project in the following ways: • Retention of a portion (10 mobile home spaces) of the existing Village Trailer Park on the Residual Parcel • Reduction in the overall square footage of the project from 378,460 square feet (sf) to 343,970 sf • Reduction in the number of residential units from 438 to 377 units • Reduction in the proposed square footage of commercial space from 25,940 sf to 24,940 sf • Reduction in the number of new buildings from four to three (eliminates Building D) Staff is comfortable with the proposed site design, building form, and location with the significantly larger residential courtyard that is surrounded by Building C and the publicly- oriented ground floor open space at Pennsylvania Avenue and New Road, both spaces being approximately 3,000 square feet. The dimensions of ground floor open space have improved such that instead of scattered smaller spaces, the project now has three distinct courtyards or gathering places that are accessible to the public. Additional rooftop open space for use by all residents of Building A, B, and C has also been included where it was previously segregated between apartment and condominium residents. The location of open space on the rooftop of Building C also serves to reduce the mass of the east side of Building C, where it is adjacent to the 10 retained trailer spaces. Staff has included additional design conditions in Section B of Exhibit D for the ARB to review with focus on the architectural design. Land Value The question of which land value to use in the economic analyses was the subject of much discussion both at the Planning Commission and City Council. The use of market valuation for the land value in the financial feasibility analysis is consistent with industry standards when conducting these kinds of analyses. If, on the other hand, purchase price were used in these analyses, it would result in a lack of consistency and would either unduly penalize or credit developers depending on their purchase price. For N example, to apply purchase price as the land value standard to a developer who has held land for many years or paid less than market value for a property could potentially provide for a larger estimated profit, providing some explanation as to why such a developer may appear more capable of providing more community benefits compared to a developer who overpaid for a property. Conversely, a pitfall of using a purchase price only methodology is that if the purchase price is significantly over market value, the City would be placed in the position of deciding whether it would be willing to forego community benefits to compensate for that overpayment. Notwithstanding, as outlined in the Community Benefits and Development Agreements City Council staff report on April 10, 2012, staff recommended and the City Council endorsed a framework for evaluating community benefits that is rooted in LUCE policies, community needs, and the public process associated with development agreements. Land value is one of a myriad of assumptions that form the basis for the economic analyses prepared for each project. Changes in assumptions can significantly affect the conclusion of economic analyses, particularly financial feasibility analyses where it is difficult to fully understand developer profitability due to many unknowns with regards to property purchase deal structure, project financing, long -term intentions, and future market conditions. Economic analyses are not used to form a precise dollar value of community benefits but are intended only as a "frame of reference ", typically near the conclusion of development agreement negotiations, to inform the decision - making process. Rather, the driving factor in determining the range or quantity of community benefits is the endorsed policy -based approach more fully described in the April 10, 2012 City Council staff report. Potential Use of Proceeds from Sale of 1920 Ocean Way Staff has explored the possibility of using the proceeds from the sale of 1920 Ocean Way. City Council approved the sale of 1920 Ocean Way for $13.15M on September 11 2012. The proceeds of the sale were to be deposited in the Citywide Housing Trust Fund for use in creating affordable housing. The Citywide Housing Trust Fund Guidelines does not allow for the City to expend those funds as the guidelines limit eligible grantees to nonprofit entities. Moreover, the proceeds from the sale may be needed for several non - profit developments in the pipeline, such as 520 Colorado Avenue and High Place East, where land and other funding sources are committed but with the loss of redevelopment funds, these projects appear to remain dependent on the City to move forward. It is important to note that with the dissolution of the City's Redevelopment Agency, these funds have become exponentially more valuable as a source for the construction of new affordable housing. Furthermore, the total proceeds from the sale are not enough to purchase the entire Village Trailer Park. Within relocation Option #1 of Exhibit K in the development agreement, the developer has committed to purchasing, installing, and transferring title to qualified VTP residents of new manufactured homes that would be architecturally similar to those that were previously approved for Mountain View by the Architectural Review Board. As a complement to that relocation option and in order to provide more housing options and flexibility for displaced Village Trailer Park residents, staff recommends that qualified VTP residents be offered compensation at a fixed price of $30,000 per unit if they choose to sell their manufactured home to the City and become a renter at Mountain View. Staff recommends that incoming VTP residents to Mountain View be provided six months to decide if they would prefer to continue to own their manufactured home or accept the guaranteed purchase price and become renters at Mountain View. This would be a one -time opportunity and the funds for purchase of the manufactured homes would be repurposed after the six -month period has lapsed. Staff has identified available funds in the TORCA Housing Trust Fund that could be used for this purpose. The guidelines for the TORCA funds are Attachment 2 to this report and state that the City may utilize TORCA funds for the development of housing projects that meet TORCA requirements. Eligible projects include the acquisition of mobile home units that are affordable to households with incomes that do not exceed 80% of median income. As Mountain View is a low- income mobile home park, the purchase of manufactured homes from former VTP residents is a project that is eligible for TORCA funds. It is anticipated that, at most, there will be 27 available spaces at E:1 Mountain View and, therefore, the maximum financial exposure to the TORCA Housing Trust Fund would be $810,000. Project Proceeding Ahead of Bergamot Area Plan The issue of the project being brought forward for public review ahead of the completion of the Bergamot Area Plan was raised as a question by the City Council at the July 24, 2012 hearing. In 2007, the City Council executed an MOW with the applicant directing staff to process the development agreement before the Council in exchange for the tolling of the then pending VTP Notice of Closure. Thus, while this process preceded the adoption of the LUCE as well as the Bergamot Area Plan, the evolution of the project from the plans originally presented to City Council on November 27, 2007 has been shaped by the LUCE and the Bergamot Area Plan, as intended by the public process. The project's site design and mix of uses has been through several iterations. As noted previously in this report, it has been significantly reduced in size since its inception. Cooperation with adjacent property owners has resulted in the inclusion of an extension of Pennsylvania Avenue, a key street network connection that accomplishes the LUCE goals of integrating the Mixed Use Creative District into the surrounding fabric of neighborhood -size city blocks while encouraging walkability and opportunities for additional ground floor open space. Moreover, in contrast to the Bergamot Transit Village land use designation text of the LUCE, the LUCE is silent on any exemption or prohibition relating to the processing of development agreements in the Mixed Use Creative designation in which the project is located, nor is there any moratorium on processing development projects that has been adopted either pursuant to state law or the City's ordinances. The project continues to be influenced by preliminary results from the Bergamot Area Plan, particularly with respect to the streetscape design, where the development agreement includes specific provisions that Pennsylvania Avenue and New Road will be designed in accordance with the streetscape standards adopted in the Bergamot Area Plan. Further, the project anticipates the district -wide shared parking strategy that is being created by the Area Plan. The goal is to ensure that the design of the parking W does not preclude the flexibility for shared parking to be implemented in the future and to provide the ability for the management and pricing of the parking to change as the area evolves and becomes more transit accessible. The endorsed framework for the Bergamot Area Plan referred to the creation of several centralized parking locations as a parking resource for the Plan area. The proposed project would be a parking resource — a tremendous benefit to the Area Plan's goals of creating a comprehensive parking program, trip reduction, and creating a pedestrian- oriented environment. To that end, the project will contain no less than the minimum number of spaces established by the Area Plan and no more than 799 spaces with no less than 162 unreserved parking spaces that can be shared between the project, future parking needs of the Residual Parcel, and parking needs of other surrounding properties. There is no tandem parking on the P1 level, which supports the efficient use of parking resources. Further, while all condominium units and affordable units will have one or two parking spaces included in the sale of their unit, all rental units in the project are required to have parking listed as a separate line item in the lease. Further, the parking rates may be market rates but shall not be competitive with comparable public transit fares and /or passes and will be reviewed by the City as part of the development agreement's annual compliance report. The project's site design has been informed by the draft urban design principles for the Plan area which focus on the use of ground floor green space and building articulation to create human - scale, walkable environments. The project's consistency with the LUCE and draft principles of the Bergamot Area Plan is more fully described in the July 24, 2012 City Council staff report for the project. Response to LAFLA Letter As stated in the July 24 2012 Supplemental City Council Staff Report, Section I of LAFLA's comment letter misunderstands the purpose of DA Section 5.6.3. The purpose of this section is not to require the Developer to terminate tenancies but to set forth the required procedure under State law to close the park for a change of use under Civil Code Section 798.56(g)(2). To avoid the construction LAFLA has given to Section 5.6.3 10 of the DA and to make its purpose clear, changes have been proposed and are attached. Similarly, a new project Condition #6 has been added to Exhibit D of the DA to ensure that no building permit may be approved or issued for new development unless and until the Developer has obtained possession of all of the real property required for the development of the project. In addition, a clarification to Section 4.3.2 has also been made to ensure that the obligations of Exhibit K survive the termination of the DA. Similarly, as also stated in the July 24, 2012 Supplemental City Council Staff Report, Section III.D. of LAFLA's comment letter states there will be an insufficient number of "Extremely Low Income" units in the new development for qualified VTP residents who wish to return to the new development under Option #3. The developer has agreed to make Very Low Income units available to VTP residents at Extremely Low Income rents should there be more than 6 income - qualifying VTP residents who choose Option #3. In the event there are more than 6 qualified VTP residents, the developer may choose which residents are assigned the converted Very Low Income units. Option #3 has been revised to reflect this change. Section III.E. of LAFLA'S comment letter identifies certain clarifications and typographical errors: • Clarify in Option #1 that developer's obligation includes installing mobile home with all utility hookups • Clarify in Option #3 that preference for "Extremely Low Income" units includes both qualified seniors and disabled residents. • Clarify in Option #3 that moving costs also include moving back to new development. • Clarify in Option #3 a typographical error. • Clarify that Option #4 is available to VTP residents who own RVs and trailers. • Request that fair market value in -place be paid by the developer to VTP residents for their existing units. The developer has accepted all but the last of LAFLA's requests and these are reflected in the attached revised Exhibit K. As previously explained at pages 45 -50 of the staff report prepared for the July 24, 2012 City Council Meeting, compensation for the in- place land value on which a mobilehome, RV or trailer is situated is not within the 11 "reasonable costs of relocation" standard set forth in applicable state law defining the steps that the Council may require the applicant to take to mitigate the impacts of the park closure on VTP residents. Unbundled and Shared Parking in the Project Since the last City Council hearing on the project, additional progress has been made in the development of the shared parking framework for the Bergamot Area Plan that have informed the project's parking program. The project previously proposed 799 parking spaces with 80 of the spaces marked as "unreserved ", which meant that they were part of the shared pool of parking spaces that could be leased to on- or off -site tenants. For the residential condominiums, each unit was essentially assigned 2 parking spaces with the studio condominiums receiving one assigned parking space. The project also included a significant amount of tandem parking spaces, which were primarily assigned to the P2 level, where parking spaces are specifically allocated to condominiums. However, tandem parking spaces on the P1 level present a hindrance to being able to support a shared parking program because a resident would be required to lease two spaces instead of one due to the parking configuration. In support of the LUCE policies that call for demand -based parking and also encouraging shared parking, the development agreement now includes provisions that provide greater flexibility in allowing the project to construct no less than the parking required by the Bergamot Area Plan or 799 spaces, the amount currently shown on the plans. The development agreement also sets a minimum number of unreserved parking spaces that can be shared between on and off -site users. All market rate rental units will be offered the option of not purchasing a parking, as it will be a separate line item on the lease. All 16 affordable units, which are only extremely low or very low income units, shall have at least one parking space included with their unit. Further, parking spaces offered to rental units which are not taken can also be added to the "unreserved" pool of parking that may be shared. Parking rates shall not be competitive with public transit fares and passes and are subject to annual review as part of the development agreement's annual compliance report. Because the shared parking 12 strategy and associated parking ratios have not yet been adopted, this language provides the greatest amount of flexibility in ensuring that the project will still be consistent with the principles of the Bergamot Area Plan The plans show 799 parking spaces in the project to accommodate the project but also to provide 40 parking spaces for the future redevelopment of the retained park as affordable housing. As provided in Section 2.10 of the DA, 10 of those 40 parking spaces are reserved for the 10 trailer spaces in the retained park while the remaining 30 spaces would only become actively tied to the Stanford parcel if and when development proceeds on that parcel. In the intervening period, those 30 parking spaces would be considered unreserved spaces also available for sharing between on- and off -site users, however, any lease for those spaces shall be terminated with one -week written notice if a residential development that requires off -site parking occurs on the Residual Parcel. Development Agreement A number of additional changes have been made to the Development Agreement that reflect changes in the project. This report addresses issues raised by these changes, including an explanation of how the project achieves equivalency with the minimum requirements of the City's Affordable Housing Production Program ( "AHPP ") through a combination of donated land, physical units, and site improvements. Affordable Housing Production Program Equivalency In order to determine whether the project complies with the minimum requirements of the Affordable Housing Production Program, an equivalency analysis was conducted that accounted for the value of the Residual Parcel, value of the dedication of 40 parking spaces, value of the infrastructure improvements to the Residual Parcel, and the on -site affordable housing units to be constructed as part of the project. The value of the Residual Parcel was determined through the methodology for land donation already established by the Affordable Housing Production Program (AHPP) in Chapter 9.56 of the Municipal Code. The market value of the land was based on recent 13 appraisals completed for the City for the Bergamot Area (approximately $160 /sf) and was applied to the Residual Parcel size of approximately 14,400 sf for a total land dedication value of $2.3M. In addition, the value of the 40 parking spaces that will be dedicated for a future affordable housing project on the Residual Parcel was based on $32,500 /parking space construction cost with other costs factored in for a total value of parking for the Residual parcel. This total land and parking value of approximately $3.9M was then divided into the affordable housing per square foot fee for condominiums ($31.94/sf), which resulted in approximately 123,000 sf of floor area (80% of Building B or 136 condos) that had its affordable housing requirement addressed through the land and parking donation. The developer elected to address the minimum AHPP requirement for the remaining 225 market -rate housing units by providing 10% of the units as very low income, which would result in 23 very low income units. Because extremely low income units are not defined in the AHPP, staff proposes giving double credit for the construction of extremely low income units (i.e. 1 extremely low income unit = 2 very low income units). Under this calculation, of the 16 proposed affordable housing units, 7 must be extremely low income and 9 must be very low income which would provide the equivalent of 23 very low income units. The project that was presented to the City Council on July 24, 2012 would have resulted in 44 affordable housing units (i.e. 10% of the housing units in the project). With the proposal in the revised project to achieve minimum AHPP compliance through a combination of land donation and physical units, staff compared the revised and previously proposed project in order to ensure that the amount of affordable housing value, calculated as a 'loss" to the developer, in both projects was equivalent, adjusted for project size. In that regard, the sum of the infrastructure improvements to the retained park of approximately $960,000, the parking and land donation, and the 16 actually constructed units is roughly equivalent to the affordable housing value that was included in the previously proposed project. It should be noted that in addition to this equivalency, the developer is also constructing an additional elevator with ground floor entry on the east side of Building C that provides more convenient access for existing IM and future residents of the Residual Parcel to the dedicated parking spaces in the subterranean parking garage. Operation, Deed Restriction and Future Transfer of the Retained Park Since the retained park is continuing to be operated as a mobile home park and is not being closed as part of the proposed project, existing VTP residents who occupy spaces in the retained park may continue to remain on their current pad and are not eligible for the relocation options outlined in Exhibit K of the DA. Since the developer will continue to operate the retained park prior to transfer to the City or designee, to the extent that there are available spaces at the retained park, the process by which displaced VTP residents are selected for the retained park will be determined by the developer. The developer has indicated that the following will be offered to any VTP resident who chooses to move to the retained park and is being displaced as a result of the partial closure of the Park: 1) Reasonable cost of moving their existing mobilehome and movable improvements such as patios, carports and porches, to one of the 10 pads on the Residual Parcel, which includes but is not limited to, dismantling, packing, moving, reassembling, rebuilding, including skirting and tie - downs, and unpacking, as necessary. 2) Developer payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 3) If an actual move by a professional moving company is chosen, as described above, payment of new utility connections, when replacing the mobile home owner's current service (excluding any possible utility deposits charged by the new providers or additional services). The DA includes a process by which the retained park would have infrastructure upgrades completed by the developer to ensure that the retained park meets all state and local requirements (Section 2.6.2(n)(i)); provisions for continued operation for a period of time by the developer (Exhibit D, Section B, Condition # 5); and the exclusive right to the eventual park transfer to an entity designated by the City or, should an entity not be identified prior to the Park Transfer Date, to the City. Given the high demands on staff time to manage City -owned properties, particularly those occupied by housing, and 15 the realities of reduced staff, transfer of the Residual Parcel to the City is not preferred but is in place as "last resort" option should the City not be able to identify a designee within the timeframes established by the DA. The DA includes provisions that the developer must give the City 180 -days notice before requesting transfer and that the transfer may not occur earlier than 15 months from the effective date of the DA. Further, transfer may also not occur if infrastructure upgrades (i.e. utility connections and life safety improvements) have not been completed and approved by the City's Building & Safety Division and Building Official. As established in Section 2.6.2(n) of the DA, with the exception of tenancies governed by the California Mobilehome Residency Law for the 10 existing trailer pads on the Residual Parcel, the Residual Parcel must be transferred to the City free of any leases, contracts or rights of occupancy or other agreements or contracts with respect to the Residual Parcel. In the event clear title cannot be transferred, the DA provides that the developer must operate the park for a period up to 20 years at which time the Park Transfer would occur. The time period between the effective date of the DA and the Park Transfer Date provides staff time to search for an appropriate entity to take possession and operate the retained park. As established by Section 2.6.2(n)(iv) a deed restriction on the property limiting future redevelopment of the Residual Parcel to affordable housing is required to be recorded by the developer before the issuance of a certificate of occupancy. Future closure of the retained park must comply with the change of use requirements of the State's mobilehome laws. Exhibit K — Relocation Plan Some of the relocation options have been adjusted to reflect the changes to those described in the July 24, 2012 Supplemental City Council Report, particularly with a modification to Option #6 (mutual agreement between resident and property owner) that includes the potential for existing VTP residents to move to the retained park (as described above in more detail) should there be available spaces. Based on 16 information gathered for the Tenant Impact Report, there are 5 vacant trailer spaces in the retained park. For clarity, because the retained park of 10 spaces is not being closed, any resident who occupies one of the retained spaces and chooses to move is not covered by the terms of this Development Agreement since they are voluntarily choosing to move as opposed to being displaced by closure of the park. Option #1 remains unchanged except that the developer has agreed to purchase, install, and transfer title of a new manufactured home that is architecturally similar to those previously approved by the ARB (instead of only qualifying mobilehomes) to residents who choose to move to Mountain View Mobilehome Park. There are an estimated 27 spaces available at Mountain View for this purpose. It will not be known precisely how many actual spaces are available until VTP residents make their relocation choice and the process of matching household size to units and available spaces is initiated. The developer is currently working with a manufactured -home provider to design homes that are architecturally similar to those that were previously approved for Mountain View by the City. These new manufactured homes would be subject to a separate Architectural Review process. Staff recommends that the City Council authorize the use of TORCA Housing Trust Funds to compensate qualified VTP residents for their new manufactured homes to the City at a fixed price, should they choose to become renters within six months of moving into Mountain View Mobilehome Park. This is based on staff's recent experience with existing Mountain View residents who, despite the financing program in place for home ownership or lease -to -own, by and large chose the rental option. Residents were not required to provide a reason for choosing the rental option but some reasons may be lower home maintenance costs and lower housing payments (rent only vs. rent + mortgage). Under the terms of the Mountain View financing program, the City provided a set compensation amount to residents who chose to become renters at Mountain View. Staff recommends providing the VTP residents with the same option with a set price of $30,000 for the manufactured home. If VTP residents do not exercise their option to sell their manufactured home to the City within 6 months of moving into 17 Mountain View, the guaranteed price will no longer be available and sale of the manufactured home would be governed by applicable State and local laws and park rules. The following is a summary statement of the revised relocation options for VTP residents: 1. Move to Mountain View Mobile Home Park — This option would involve the park owner purchasing and installing at the Mountain View Mobile Home Park a manufactured home that is reasonably similar architecturally to those previously approved by the Architectural Review Board, and transferring title to qualified VTP residents who choose to move to the Mountain View Mobile Home Park. There are an estimated 27 spaces available at Mountain View for this purpose. This option would not include payment to residents for fair market value of their existing units, as indicated in Table 6 of the Tenant Impact Report, because replacement housing is being purchased by the developer. 2. Fixed payment in lieu of actual move costs — This option is available to all,VTP residents where, based on at least three estimates by professional movers, residents will receive payment for actual costs to move their existing mobile home to another mobile home park. This option is also available to all residents who own RVs and Trailers that cannot be moved to another mobile home park. 3. Temporary Relocation with Option to Move Back to VTP — This option would involve residents temporarily relocating for an interim period to rental housing with the option to move back to deed - restricted units in the new project. For extremely low income, very low income, and low income households, the park owner would pay the rent differential between residents' existing pad rent and $1352, which is equivalent to the Section 8 payment standard for 1- bedroom units in Santa Monica, for up to 7.5 years or project completion, whichever is earliest. For all other households, the rent differential would be required for the earlier of project completion or 4 years. If there are more than 7 extremely low income VTP residents who choose this option then all qualified residents in im excess of 7 shall be offered leases in the Very Low Income units in the project provided the rent payable will not exceed Extremely Low Income rents. 4. Move to another mobile home park outside of Santa Monica — This option would involve the park owner purchasing and installing a qualifying mobile home and transferring title to residents who choose to move to another mobile home park. This option would not include payment to residents for fair market value of their units, as indicated in Table 6 of the Tenant Impact Report, because replacement housing is being purchased by the developer. 5. Move to conventional rental housing — This option would allow residents to move to rental housing with the park owner paying the rent differential between replacement rent and existing pad rent up to a total replacement rent of $1352. The payment of the rent differential would be provided for up to 4 years. 6. Mutual agreement between park owner and resident — This option covers other situations, including moving to the retained park, where each resident has the choice of negotiating relocation benefits with the park owner on their own. 7. Seasonal residents — This option requires the payment of the tenant relocation assistance established by SMMC Section 4.36 to residents whose primary residence is at a location other than VTP. Aside from the options themselves, the park owner is required to post security for the full amount of the relocation plan after residents have made their selection at the conclusion of a 120 -day selection period. For all options other than #2 and #7, residents will receive the equivalent of first and last month's rent in order to cover the initial housing search and to have cash on hand to secure leases, whether in another mobilehome park or apartment. Once transfer of title for their existing VTP unit has occurred, the remainder of payments and benefits will be provided. For Options #3 and #5 that involve rent differential, the remainder will be received in monthly installments based on the option selected. In negotiating the relocation plan proposed as Exhibit K to the development agreement, staff met with representatives of the park owners and residents. Although the scope 19 and value of maximum possible relocation benefits for each resident ranges between $18,500 to $85,000 depending on the option chosen, staff disagrees with some park residents representatives' demands that the park owner pay the "in place" value of RVs, trailers, and mobilehomes, or that the requirements of the CRAA should apply as if this were a government caused closure. These issues are discussed in detail on pages 45- 50 of the July 24, 2012 City Council staff report. Community Benefits Adiustments Due to the reduction of units and floor area in the project, the amount of community benefits contributions has been scaled down proportionately. Transportation Infrastructure Fee The amount has been reduced by $200,000 to reflect the reduction in the number of residential units. The proposed contribution is now $1,650,000. Childcare Contribution The childcare contribution has been scaled down, consistent with the methodology for how the contribution was initially determined, which was the Municipal Code requirement plus $5,000 of community benefit. Some of the community benefit contribution that was initially associated with childcare was transferred to contributions for disabled and senior services because the closure of the park, with many disabled and elderly residents, created a greater need for those services than childcare. The proposed childcare contribution is now $179,000. Contribution to Disabled and Senior Services The contribution to senior and disabled services was intended to address the increased service population created by the closure of Village Trailer Park. While 10 spaces are retained, it is arguable that the same amount of elderly and disabled residents could still potentially be displaced and therefore, staff recommends keeping this contribution at the previously negotiated amount of $350,000. 20 In summary, guided by the LUCE five priority categories of community benefits and generally confirmed through the Bergamot Area Plan process, the development agreement includes a range of negotiated community benefits including the following: • Two new streets (Pennsylvania Avenue and New Road) that will be dedicated to the City as surface easements • Transportation Infrastructure Fee of $1,650,000 • Contribution of $179,000 to trust fund to be used for childcare subsidies for low - income families (includes voluntary assignment of required childcare linkage fee) • Contribution of $350,000 to trust fund to be used for services for seniors, disabled persons, and families with minor children with priority given to entities who are providing services to VTP residents • Ground floor public open space • Approximately 27,000 sf of general public open space including expanded sidewalks for outdoor dining and gathering on Colorado Avenue, smaller on -site plazas, pedestrian pathways, and green space at the intersection of New Road and Pennsylvania Avenue • Approximately 15,000 sf of residential public open space including pedestrian pathways and courtyards • Local hiring program for construction • Local hiring program for permanent employment for commercial uses greater than 1,500 sf The project further includes a number of significant features that may not be Code requirements but are expectations established by LUCE goals and policies, including 16 affordable housing units and donation of land for the continued operation of 10 existing trailer spaces with the ability to develop the site for future affordable housing, commitment to achieve LEED® Silver certification, EV conduits in the parking garage, and a comprehensive TDM Plan that among other elements, includes peak hour trip caps and subsidies for transit passes that apply to the entire project. Environmental Analysis The revisions to the project plans which include retaining a portion of the mobile home park resulted in potentially significant impacts with respect to Aesthetics (Shade and Shadows). Pursuant to CEQA Guidelines Section 15088.5(a), a Recirculated EIR was prepared and recirculated for a 45 -day public review period from August 31, 2012 to October 15, 2012. In total, 17 comment letters regarding the Recirculated EIR were received from 3 public agencies and 14 individuals. The Revised Final EIR, which was 21 published on November 1, 2012, contains all comments and responses to comments received during the comment period for the Recirculated EIR and analyzes the revised project. The Revised Final EIR consists of: 1) Original Draft EIR dated September 2011 2) Original Final EIR dated April 2012 3) Recirculated EIR portions dated August 2012 (these sections supercede corresponding sections in the original Draft EIR) 4) Correction and Additions to Recirculated EIR 5) Comments and Responses to Recirculated portions of the Final EIR The Recirculated EIR identified a new significant and unavoidable impact with respect to Shade and Shadows. This results because the duration of the shadow effect of the revised project on the existing mobile homes that would remain to the east would exceed a period of three hours between 9:OOam and 3:OOpm in the winter. Statement of Overriding Considerations Due to the significant and unavoidable impacts of the project with respect to Aesthetics (shade and shadows), Construction Effects (ground borne vibration and localized construction emissions for air quality), and Traffic, approval of the proposed project will require the City Council to adopt a Statement of Overriding Considerations. The benefits of the proposed project have been discussed earlier in this report as well as the July 24, 2012 staff report, and would be incorporated into the Council resolution adopting the Statement of Overriding Considerations and Mitigation Monitoring Program. Conclusion The revised project currently being proposed by the developer is in response to the spirit of Council's discussions that were initiated in November 2007, carried through December 2011, and further expanded in July 2012. The developer is proposing to retain 10 trailer spaces on the eastern edge of Village Trailer Park, make infrastructure improvements to the retained park to ensure that all utility connections meet current Codes, deed restrict the 14,400 sf parcel for affordable housing, and transfer the parcel 22 to the City or designee at no cost. Keeping 10 trailer spaces would allow residents who currently reside in the retained park to continue to live in the park while also allowing displaced VTP residents to move to the retained park through a process established by the developer, should spaces be available. The revised project is a reduction in total floor area and number of residential units while improving on the type and mix of units and average unit size. The revised project also restricts all affordable units to either very low or extremely low income households, fulfilling an important community need. The dimensions of the ground floor open space have also been improved to be more useable by on -site residents and tenants as well as the general public. The reduction in the size of the project and number of units has naturally resulted in improvements in the building form and provided opportunities to create more openness on the site. Staff's recommendation is based on the following • The project's consistency with the LUCE and features of the project and development agreement provisions that anticipate key elements of the Bergamot Area Plan, particularly with respect to streetscape design and parking. • The retention of 10 trailer spaces that responds to direction from the Planning Commission and City Council to consider an alternative that protects as much of the existing trailer spaces as feasible. • Negotiated community benefits that were guided by the LUCE five priority categories of community benefits and generally confirmed through the Bergamot Area Plan process including a transportation infrastructure fee of $1,650,000; childcare contribution of $179,000; contribution for senior and disabled services in the amount of $350,000; approximately 42,000 sf of ground floor green .space and the dedication of two new streets (in combination approximately 50% of the project site); and $50,000 towards the formation of a future Bergamot Transportation Management Association. • A relocation plan that meets the requirements of Government Code Sections 65863.7(e) and 66427.4(c) by offering a broad range of reasonable relocation options for displaced VTP residents to select, including moving to MVMHP, moving to another mobile home park, moving to rental housing with payment of rent differential, or moving into the new project at extremely low income rents for qualifying VTP residents. 23 Financial Impacts & Budget Actions With regard with to the development agreement, there are no immediate financial impact or budget actions associated with the recommendations in this report. Staff will return to Council to request approval of any necessary budget actions that may be associated with approval of the development agreement. Based on preliminary estimates by TNDG consulting group (detailed in Attachment 3), the project may result in a net annual surplus to the City's General Fund of approximately $3,000. This takes into consideration potential increased revenue in the form of property, sales, and other taxes as well as license and permitting fees, and also accounts for potential increased City expenditures due to providing public safety and other public services to the new development. The project will also provide an estimated $597,118 in annual recurring revenues to other taxing entities such as the school district, community college district, and water district. These estimates are preliminary and are subject to change. 24 Staff recommends that the City Council authorize staff to use TORCA Housing Trust Funds to provide qualified VTP residents who choose to move to Mountain View a one- time opportunity to sell their new manufactured homes to the City for a fixed price of $30,000. Funds to purchase manufactured homes from qualified VTP residents are available in Fund H14073401.589000, with sufficient funds available to cover the maximum financial exposure to the TORCA Housing Trust Fund of $810,000 in the event that all 27 qualified VTP residents who move to Mountain View decide to sell their new manufactured homes. Prepared by: Jing Yeo, Special Projects Manager Approved: D4 "J-L� David Martin Director, Planning and Community Development Attachments Forwarded to Council: Rod Gould City Manager 1. Revised Development Agreement including Exhibit K 2. TORCA Housing Trust Fund Guidelines 3. Revised Peer Review of Fiscal Impact Analysis, November 2012 4. Revised Economic Impact Analysis, November 2012 5. Revised Peer Review of Value Enhancement Analysis, November 2012 6. Revised Peer Review of Pro Forma, November 2012 7. Project Plans 8. Recirculated Portions of the FEIR, public comments and agency response, November 2012 9. Revised Resolution Certifying the Environmental Impact Report 10. Revised Resolution Adopting the Statement of Overriding Considerations and Mitigation Monitoring Plan 11. Draft Ordinance 25 ATTACHMENT REVISED DEVELOPMENT AGREEMENT INCLUDING EXHIBIT K Recording Requested By: City of Santa Monica When Recorded Mail To: City of Santa Monica Santa Monica City Attorney's Office 1685 Main Street, Third Floor Santa Monica, CA 90401 Attention: Senior Land Use Attorney Space Above Line For Recorder's Use No Recording Fee Required California Government Code Section 27383 DEVELOPMENT AGREEMENT BETWEEN CITY OF SANTA MONICA AND VILLAGE TRAILER PARK, LLC AND VILLAGE TRAILER PARK (as Tenants in Common) 2012 TABLE OF CONTENTS Recitals............................................................................................................ ............................... l Article1 Definitions ................................................................................ ..............................6 Article 2 Description of the Project ....................................................... ............................... 8 2.1 General Description ................................................................. ..............................8 2.2 Principal Components of the Project ...................................... ............................... 8 2.3 No Obligation to Develop ..................................................... ............................... 11 2.4 Vested Rights ........................................................................ ............................... 11 2.5 Permitted Uses ........................................................................ .............................13 2.6 Significant Project Features and LUCE Community Benefits ............................15 2.7 Parking .................................................................................... .............................30 2.8 Design .................................................................................... .............................30 2.9 Tract Map .............................................................................. ............................... 31 2.10 Parking Easement in Favor of Residual Parcel ......... :.......................................... 31 2.11 Contract With City ....................................................................... .............................31 Article3 Construction ............................................................................ .............................32 3.1 Construction Mitigation Plan ................................................ ............................... 32 3.2 Construction Hours ............................................................... ............................... 32 3.3 Outside Building Permit Issuance Date .................................. .............................32 3.4 Construction Period ................................................................ .............................33 3.5 Damage or Destruction ........................................................... .............................33 Article 4 Project Fees, Exactions, Mitigation Measures and Conditions ............................33 4.1 Fees, Exactions, Mitigation Measures and Conditions ........... .............................33 4.2 Conditions on Modifications ................................................... .............................33 4.3 Implementation of Mitigation Measures and Conditions of Approval ................33 Article 5 Effect of Agreement on City Laws and Regulations ............ ............................... 34 5.1 Development Standards for the Property; Existing Regulations .........................34 5.2 Permitted Subsequent Code Changes ..................................... .............................35 5.3 Common Set of Existing Regulations ..................................... .............................36 5.4 Conflicting Enactments ........................................................... .............................36 5.5 Timing of Development .......................................................... .............................37 5.6 Process for Closure of Village Trailer Park ............................ .............................37 Article 6 Architectural Review Board ................................................. ............................... 38 6.1 Architectural Review Board Approval ................................. ............................... 38 Article 7 City Technical Permits ............................................................ .............................38 7.1 Definitions ............................................................................... .............................38 7.2 Diligent Action by City ........................................................... .............................39 7.3 Conditions for Diligent Action by the City ........................... ............................... 39 7.4 Duration of Technical City Permits ...................................... ............................... 40 Article 8 Amendment and Modification ................................................ .............................40 8.1 Amendment and Modification of Development Agreement .. .............................40 Article9 Term ........................................................................................ .............................41 9.1 Effective Date ......................................................................... .............................41 9.2 Term ........................................................................................ .............................41 Article 10 Periodic Review of Compliance ................................................. ............................... 41 10.1 City Review ............................................................................ .............................41 10.2 Evidence of Good Faith Compliance ...................................... .............................41 10.3 Information to be Provided to Developer ............................... .............................42 10.4 Notice of Breach; Cure Rights ................................................ .............................42 10.5 Failure of Periodic Review ................................................... ............................... 42 10.6 Termination of Development Agreement ............................. ............................... 42 10.7 City Cost Recovery ................................................................. .............................42 Article11 Default ..................................................................................... .............................43 11.1 Notice and Cure .................................................................... ............................... 43 11.2 Remedies for Monetary Default ............................................ ............................... 43 11.3 Remedies for Non - Monetary Default ..................................... .............................44 11.4 Modification or Termination Agreement by City ................... .............................46 11.5 Cessation of Rights and Obligations ....................................... .............................47 11.6 Completion of Improvements ............................................... ............................... 47 Article12 Mortgagees .............................................................................. .............................47 12.1 Encumbrances on the Property ............................................. ............................... 47 Article 13 Transfers and Assignments ..................................................... .............................49 13.1 Transfers and Assignments ..................................................... .............................49 13.2 Release Upon Transfer .......................................................... ............................... 49 Article 14 Indemnity to City .................................................................. ............................... 50 14.1 Indemnity .............................................................................. ............................... 50 14.2 City's Right to Defense ......................................................... ............................... 50 Article 15 General Provisions .................................................................. .............................51 15.1 Notices .................................................................................. ............................... 51 15.2 Entire Agreement; Conflicts ................................................. ............................... 51 15.3 Binding Effect ......................................................................... .............................52 15.4 Agreement Not for Benefit of Third Parties ......................... ............................... 52 15.5 No Partnership or Joint Venture ............................................. .............................52 15.6 Estoppel Certificates ............................................................... .............................52 15.7 Time ........................................................................................ .............................53 15.8 Excusable Delays .................................................................... .............................53 15.9 Governing Law ..................................................................... ............................... 54 15.10 Cooperation in Event of Legal Challenge to Agreement ...... ............................... 54 15.11 Attorneys' Fees ..................................................................... ............................... 54 15.12 Recordation ............................................................................. .............................54 15.13 No Waiver ............................................................................... .............................54 15.14 Construction of this Agreement ............................................ ............................... 55 15.15 Other Governmental Approvals ............................................ ............................... 55 15.16 Venue ..................................................................................... .............................56 15.17 Exhibits ................................................................................. ............................... 56 15.18 Counterpart Signatures ............................................................ .............................57 15.19 Certificate of Perf ormance ...................................................... .............................57 15.20 Interest of Developer ............................................................. ............................... 57 15.21 Operating Memoranda .......................................................... ............................... 57 15.22 Acknowledgments, Agreements and Assurance on the Part of Developer ......... 58 15.23 Not a Public Dedication ........................................................ ............................... 58 15.24 Other Agreements ................................................................. ............................... 58 15.25 Severability and Termination ................................................ ............................... 58 Exhibit "A" Legal Description of Property Exhibit `B" Project Plans Exhibit "C" Permitted Fees and Exactions Exhibit "D" Mitigation Measures and Conditions of Approval Exhibit "E" SMMC Article 9 (Planning and Zoning) Exhibit "F -1" Local Hiring Program for Construction Exhibit "F -2" Local Hiring Program for Permanent Employment Exhibit "G -1" Pennsylvania Avenue Extension Easement Area Exhibit "G -2" New Road Easement Area Exhibit "G -3" Public Use Areas Exhibit "H" Santa Monica Sign Code Exhibit "P' Construction Mitigation Plan Exhibit "J" Assignment and Assumption Agreement Exhibit "K" VTP Resident Relocation Program Exhibit " L" Tract Map Exhibit "M" Exceptions to Title to Residual Parcel DEVELOPMENT AGREEMENT This Development Agreement ( "Agreement "), dated for reference purposes , 2012, is entered into by and between VILLAGE TRAILER PARK, LLC, a California limited liability company, and VILLAGE TRAILER PARK, a California corporation (as Tenants in Common, collectively, "Developer "), and the CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica (the "City "), with reference to the following facts: RECITALS A. Pursuant to California Government Code Section 65864 et seq., Chapter 9.48 of the Santa Monica Municipal Code, and Santa Monica Interim Ordinance No. 2356 (collectively; the "Development Agreement Statutes "), the City is authorized to enter into binding development agreements With persons or entities having a legal or equitable interest in real property for the development of such real property. B. Developer is the owner of approximately 3.85 acres of land located in the City of Santa Monica, State of California, commonly known as 2930 Colorado Avenue, as more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property "). The Property is currently developed with the following improvements: (1) Trailer park with 109 rent - controlled pads, of which 59 were occupied by units as of the date of publishing of the Tenant Impact Report; and (2) Accessory improvements including: one -story manager's residence; community building containing office, clubhouse, library, and restrooms; swimming pool; and laundry building. C. The City has included the Property within the "Mixed -Use Creative" land use designation under the City's recently adopted Land Use and Circulation Element of its General Plan (the "LUCE "). The Property is located within the Residential Mobile Home Park District (R -MH) according to Section 9.04.08.06.010 of the City's Zoning Ordinance. To aid in the redevelopment of the Property, the City and Developer desire to allow Developer to construct new buildings, subterranean parking, and related facilities. D. On June 25, 2007, Developer filed an application for a Development Agreement, pursuant to Santa Monica Municipal Code ( "SMMC ") Section 9.48.020 (the "Development Application "). The Development Application was designated by the City as Application No. 07- DEV005. The Development Application was for the closure of the entire trailer park for redevelopment into a mixed use residential, production office and retail project. E. To facilitate financing and development of the Property, Developer filed an application for a tentative tract map (the "Initially Piled Tract Map "), that would have created one ground parcel and two airspace parcels (including one airspace parcel below grade for the subterranean parking garage), that would have allowed for the future buildings and a common area lot which includes surface and subterranean parking, driveways and drive aisles, landscaping and hardscape and other common improvements. The application for the Initially Filed Tract Map was designated by the City as Tentative Tract Map No. 71974. F. On August 13, 2012, Developer submitted revisions to the proposed project to be developed under this Agreement. The revised plan is for the closure of 99 rent - controlled pads and redevelopment into a mixed use residential, production office and retail project that is more fully described in this Agreement. At the same time, Developer modified the Initially Filed Tract Map such that the modified tentative tract map (the "Tract Map ") will create two ground parcels and two airspace parcels; including one airspace parcel below grade for the subterranean parking garage and one airspace parcel above grade for Building C, that will allow for the future buildings and a common area lot which includes surface and subterranean parking, driveways and drive aisles, landscaping and hardscape and other common improvements. A copy of the Tract Map is attached as Exhibit "L" to this Agreement. G. The Tract Map will include (a) Ground Parcel 1 on which there will be the option to include up to 216 condominium units and on which will be allowed the future buildings and a common area lot which includes surface and subterranean parking, driveways and drive aisles, landscaping and hardscape and other common improvements and (b) the two airspace parcels described in Recital F above (collectively, the "Project Property Ground Parcel [2] on the Tract Map will preserve ten (10) existing Trailer park pads on such Ground Parcel [2] (the "Residual Parcel"). H. On November 27, 2007, Village Trailer Park, LLC, on behalf of Developer, and the City executed that certain Memorandum of Understanding (the "MOU "). Prior to execution of the MOU, on October 27, 2006, Developer delivered written notice (the "Closure Notice ") to the then - residents of the Property, which superseded a previous closure notice dated July 10, 2006, with the intention that the Closure Notice constituted the twelve month advance notice required by Section 798 subsection (g)(2) of the Mobilehome Residency Law (Civil Code §798 et seq.). I. As described in the MOU, Developer and the City did not agree whether Developer was required to obtain a so- called "removal permit" from the Santa Monica Rent Control Board prior to issuing the Closure Notice. Developer agreed in the MOU to pursue approval of this Agreement, while at the same time preserving Developer's claim that the Closure Notice was a valid and effective notice that conformed to the requirements of Section 798.56 subsection (g)(2) of the Mobilehome Residency Law. During the period between the execution of the MOU and the execution of this Agreement, the City has determined that each and every VTP Resident has received adequate notice of the pending change of use of the Property and that the public hearing preceding the execution of this Agreement constitute full compliance by Developer with the notification requirements for a change of use of the Property set forth in the Mobilehome Residency Law, including without limitation, Civil Code Section 798.56, and Government Code Sections 65863.7 and 65863.8. J. In accordance with Government Code Sections 65863.8, the City has informed Developer of Developer's obligation to provide notices to the residents of the Property pursuant to Section 798.56 of the Civil Code. The City finds that Developer has complied in all respects with the City's requirements regarding notices to the residents of the Property of the pending closure of the mobilehome park. The City also finds that, prior to the date the City held a hearing on the Development Application, Developer has verified to the City's satisfaction that the residents and trailer or mobilehome owners at the Property have been so notified, in the manner prescribed by law and has thus complied with the requirements of Government Code Section 65863.8. K. City has prepared a report on the impact of the closure of the mobilehome park on the Property upon the residents of the mobilehome park to be displaced (the "Tenant Impact Report "). In accordance with Government Code Section 65863.7 subsection (a), the City finds that the Tenant Impact Report adequately addresses the availability of adequate replacement housing in mobilehome parks and relocation costs. L. The City finds that a copy of the Tenant Impact Report has been provided to a resident of each trailer or mobilehome in the mobilehome park at least 15 days prior to the date of the hearing to consider this Agreement, in accordance with Government Code Section 65863.7 subsection (b). M. The City has reviewed the Tenant Impact Report and, based upon the information in the Tenant Impact Report finds that the VTP Resident Relocation Plan set forth in Exhibit "K" attached hereto constitutes adequate mitigation of all adverse impacts of the closure of the mobilehome park on the Property, including the impacts on the ability of displaced mobilehome park residents to find adequate housing in a mobilehome park. N. On February 8, 2011, the City Council adopted Interim Ordinance Number 2345 ( "IZO ") establishing interim development procedures pending implementation of the LUCE through a revised Zoning Ordinance. On April 26, 2011, the City Council adopted Ordinance No. 2356 extending and amending Ordinance Number 2345. On February 28, 2012, the City Council adopted Ordinance Number 2394, further extending and amending Ordinance Number 2345. On August 28, 2012, the City Council adopted Ordinance Number 2407, further extending and amending Ordinance Number 2345. The IZO prohibits the issuance of permits for development projects which would constitute a Tier 2 or Tier 3 project as established pursuant to LUCE Chapter 2.1 or which would exceed 32 feet in height in the Mixed -Use Creative District as delineated in the Land Use Designation Map approved by the City Council on July 6, 2010 unless developed pursuant to a development agreement adopted in accordance with SMMC Chapter 9.48. Adoption of this Agreement will allow for the issuance of permits for the Project. O. Developer has paid all necessary costs and fees associated with the City's processing of the Development Application and this Agreement. P. The primary purpose of the Project is to provide the Mixed -Use Creative District with needed market rate and affordable residential units, including apartments and condominiums or townhomes, as well as commercial space that will be developed as either creative office and /or production space and retail uses. The Parties desire to enter into this Agreement in conformance with the Development Agreement Statutes in order to achieve the development of the Project on the Project Property. Q. The City Council has determined that a development agreement is appropriate for the proposed development of the Project Property and to require the Developer to take steps to mitigate the adverse impacts of the mobilehome park closure pursuant to Government Code Section 65863.7(e). This Agreement will (1) eliminate uncertainty in planning for the Project and result in the orderly development of the Project Property, (2) assure installation of necessary improvements on the Project Property, (3) result in infrastructure improvements to the retained 10 -unit mobilehome park on the Residual Parcel, (4) provide for public infrastructure and services appropriate to development of the Project, (5) preserve substantial City discretion in reviewing subsequent development of the Project Property, (6) secure for the City improvements that benefit the public, and (7) otherwise achieve the goals and purposes for which the Development Agreement Statutes were enacted. R. This Agreement is consistent with the public health, safety, and welfare needs of the residents of the City and the surrounding region. The City has specifically considered and approved the impact and benefits of the development of the Project on the Project Property in accordance with this Agreement upon the welfare of the region. The Project will provide a number of significant project features, including without limitation the following: (1) providing 377 dwelling units that will maximize housing opportunities near the future Metro Exposition Light Rail Line station, consisting of (a) 161 apartment units (99 shall be rent - controlled units) of which 9 shall be deed - restricted for Very Low Income units, and 7 shall be Extremely Low Income units; (b) 216 condominium units comprised of (i) 88 studio condominium units; (ii) 83 one - bedroom condominium units; (iii) 41 two - bedroom condominium units; and (iv) 4 three- bedroom condominium units; (c) up to 4,250 square feet of creative office / production space (that may be converted to retail space depending upon market conditions); (2) not less than 20,700 square feet of retail space; (3) improving traffic circulation through the construction of an extension to Pennsylvania Avenue and the construction of a new road on the Project Property; (4) increased on- street public parking spaces along the new road and along the Pennsylvania Avenue extension; (5) on -site, publically accessible courtyard /plaza areas and a pedestrian Pasco that would connect through the site; (6) co- locate jobs, neighborhood serving commercial and housing on the same site to reduce vehicle trips; (7) add to the entry -level housing stock in the City by constructing for -sale, smaller `affordable by design' residential units; and (8) improving the aesthetics of the Project Property through the construction of new, well- designed buildings and enhanced landscaping. All of the for -sale units will be sold at market rates. S. The City Council has found that the provisions of this Development Agreement are consistent with the relevant provisions of City's General Plan, including the LUCE. M T. On May 23, 2012, May 30, 2012, and on June 20, 2012, the City's Planning Commission held duly noticed public hearings on the Development Agreement The Commission recommended that the City Council certify the environmental impact report for the Project and approve the Development Agreement subject to recommendations regarding the relocation plan, project design, and community benefits. U. On July 24, 2012, the City Council held a duly noticed public hearing on the Development Agreement and at such hearing the City considered the environmental impact report for the Project, this Agreement (as modified pursuant to recommendations by the Planning Commission), took public comment on the proposed project and instructed staff to consider certain issues regarding the proposed project, and continued the public hearing to a future date. V. In response, on August 8, 2012, Developer requested a continuance in order to consider project reconfiguration. W. On August 13, 2012, Developer submitted revised project plans. As a result, the City recirculated portion of the Final Environmental Impact report pursuant to CEQA Guidelines Section 15088.5. X. On November 13, 2012, the City Council held a duly noticed public hearing on the Development Agreement and at such hearing the City certified the environmental impact report for the Project, this Agreement (as modified pursuant to the amendment to the Development Application and the Tract Map, adopted resolutions adopting the mitigation monitoring Program and Statement of Overriding Considerations, and introduced Ordinance No. for first reading, approving this Agreement. Y. On 2012, the City Council adopted Ordinance No. , approving this Agreement. NOW THEREFORE, in consideration for the covenants and conditions hereinafter set forth, the Parties hereto do hereby agree as follows: ARTICLE 1 DEFINITIONS The terms defined below have the meanings in this Agreement as set forth below unless the context otherwise requires: 1.1 "Affordable Units" means all Very Low Income Units, and all Extremely Low Income Units in the Project. 1.2 "Agreement" means this Development Agreement entered into between the City and Developer as of the Effective Date. 1.3 "AMI" means the area median income published from time to time by the City's Department of Housing and Economic Development, based on the United States Department of Housing and Urban Development (HUD) estimate of income for a four - person household in for the Los Angeles -Long Beach Primary Metropolitan Statistical Area, as adjusted for the household size of the unit in question. 1.4 "ARB" means the City's Architectural Review Board. 1.5 "Building" means any of the four new buildings to be constructed as part of the project. 1.6 "City Council" means the City Council of the City of Santa Monica, or its designee. 1.7 "City General Plan" or "General Plan" means the General Plan of the City of Santa Monica, and all elements thereof including the LUCE, as of the Effective Date unless otherwise indicated in this Agreement. 1.8 "Discretionary Approvals" are actions which require the exercise of judgment or a discretionary decision, and which contemplate and authorize the imposition of revisions or additional conditions, by the City, including any board, commission, or department of the City and any officer or employee of the City. Discretionary Approvals do not include Ministerial Approvals. 1.9 "Effective Date" has the meaning set forth in Section 9.1 below. 1.10 "Extremely Low Income Units" mean units set aside for Extremely Low Income households, as defined by the California Department of Housing and Community Development. 1.11 "Floor Area" has the meaning given that term in Section 9.04.02.030.315 of the Zoning Ordinance; provided that subterranean space occupied by common rooms no and other amenities available only to the residential tenants and owners of the Project, and storage areas shall not be included in the calculation of Floor Area, including without limitation for the purposes of determining whether improvements comply with the Maximum Floor Area limitation and in calculating Floor Area Ratio. The Parties acknowledge that the City is in the process of updating the Zoning Ordinance, and the Parties agree that, upon the City's adoption of the new Zoning Ordinance, the Developer may make a one -time election whether to have the definition of Floor Area have the meaning as contained in this Agreement or as contained in the City's new Zoning Ordinance. 1.12 "Floor Area Ratio" and FAR" means floor area ratio as defined in Section 9.04.02.030.320 of the Zoning Ordinance. 1.13 "Including" means "including, but not limited to." 1.14 "LEED® Rating System" means the Leadership in Energy and Environmental Design (LEED®) Green Building rating System for New Construction & Major Renovations adopted by the U.S. Green Building Council. 1.15 "Legal Action" means any action in law or equity. 1.16 "Maximum Floor Area" means 341,290 square feet of Floor Area. 1.17 "Ministerial Approvals" mean any action which merely requires the City (including any board, commission, or department of the City and any officer or employee of the City), in the process of approving or disapproving a permit or other entitlement, to determine whether there has been compliance with applicable statutes, ordinances, regulations, or conditions of approval. 1.18 "Parties" mean both the City and Developer and "Party" means either the City or Developer, as applicable. 1.19 "Pedestrian- Oriented Design" has the meaning as defined in Section 9.04.10.02.440 of the Zoning Ordinance. 1.20 "Pedestrian- Oriented Use" has the meaning as defined in Section 9.04.02.030.65 of the Zoning Ordinance. 1.21 "Planning Director" means the Planning Director of the City of Santa Monica, or his or her designee. 1.22 "Project Plans" mean the plans for the Project that are attached to this Agreement as Exhibit "B." 1.23 "Project Property" means that portion of the Property to be developed pursuant to this Development Agreement as defined in Recital G. 1.24 "Very Low Income Units" mean units set aside for Very Low Income households, as defined by SMMC, Section 9.56.020. 1.25 "VTP Resident" is a person who has a tenancy in the Property under a rental agreement as provided in California Civil Code Section 798.9. 1.26 "Zoning Ordinance" means the City of Santa Monica Comprehensive Land Use and Zoning Ordinance (Chapter 9.04 of the SMMC) and any applicable Interim Zoning Ordinance as the same are in effect on the Effective Date, is set forth in its entirety in Exhibit "E" (Planning and Zoning). ARTICLE 2 DESCRIPTION OF THE PROJECT 2.1 General Description. The Project includes all aspects of the proposed development of the Property as more particularly described in this Agreement and on the Project Plans. If there is a conflict or inconsistency between the text of this Agreement and the Project Plans, the Project Plans will prevail; provide, however, that omissions from the Project Plans shall not constitute a conflict or inconsistency with the text of this Agreement. 2.2 Principal Components of the Project. The Project consists of the following principal components: 2.2.1 Building A. Building A would contain approximately 48,570 gross square feet with a height from 46.5 to 57 feet. The ground floor would include approximately 7,280 square feet of commercial space. Portions of the ground floor and the second through fourth floors of Building A would be comprised of 46 residential condominium units containing, in the aggregate, approximately 41,300 square feet of space. Building A will also include a rooftop deck with a pool, a gym and restroom facilities to serve as common area amenities for the residents of Buildings A, B and C. 2.2.2 Building B. Building B would contain approximately 167,290 gross square feet and range in height from 36 to 57 feet. The ground floor would include approximately 13,420 square feet of commercial space. Portions of the ground floor and the second through fifth floors of Building B would be comprised of 170 residential condominium units containing, in the aggregate, approximately 153,880 square feet of space. Building B will also include a rooftop deck with multiple seating areas to serve as common area amenities for the residents of Buildings A, B and C. 2.2.3 Building C — Initial Construction. Building C would contain approximately 125,420 gross square feet and range in height from 36 to 57 feet. The ground floor would include approximately 4,250 square feet of commercial space. Portions of the ground floor and the second through fifth floors of Building C would be comprised of 161 for -rent residential apartment units (the "Rental Housing Units "), of which 99 units will be rent - controlled, containing, in the aggregate, approximately 121,170 square feet of space. Building C will also include a rooftop terrace overlooking Pennsylvania Avenue to serve as common area amenities for the residents of Buildings A, B and C. As set forth in the conditions of approval for the project (Exhibit "D "), no certificate of occupancy may be issued for Buildings A or B unless and until the construction of Building C is completed and Building C is issued a certificate of occupancy. 2.2.4 Building C — Additional Construction. The Building C described in Section 2.2.3 may be enlarged to include an additional 1,770 square feet of commercial space on the ground floor; provided that the roadway that includes the New Road (defined below in Section 2.6.2d)) is integrated with an expansion of the New Road to be constructed on the Adjacent Property (defined below in Section 2.6.2d)). 2.2.5 Commercial Space. The Project will contain, in the aggregate, approximately 24,940 square feet of non - residential, commercial space that will be comprised of 4,250 square feet of creative office /production space (provided that such space could be converted to retail space, depending on market conditions) and not less than 20,700 square feet of neighborhood- serving retail. 9,260 square feet of the neighborhood- serving retail space will front Colorado Avenue. 2.2.6 For -Rent Residential Units. The Rental Housing Units would include 161 total apartment units, comprised of the following: (a) 145 apartment units would be market -rate apartments and (b) 16 apartment units would be Affordable Units. The 16 Affordable Units that are for -rent apartments will be comprised of 9 units that would be deed restricted as Very Low Income Units; and 7 units that would be deed restricted as Extremely Low Income Units. The maximum allowable rents for the Very Low Income Units shall be as established annually by the City for all such affordable housing units in the City. The maximum allowable rents for Extremely Low Income Units shall be 60% of maximum allowable rents for Very Low Income Households as established annually by the City. Affordable Units shall comply with the requirements of SMMC Chapter 9.56, except that some of the Affordable Units may not be as large as the minimum square feet requirements for such Affordable Units set forth in SMMC Chapter 9.56. 2.2.7 Condominium Residential Units. In addition to the Rental Housing Units, the Project will include 216 condominium units (the "Condominium Units "). It is Developer's intention to offer the Condominium Units for sale, but based upon market conditions at the time the Condominium Units are completed, Developer may offer one or more of the Condominium Units as rental units, at market rates. The Condominium Units that will be constructed as part of the project include the following: (a) 88 studio units; (b) 83 one - bedroom units; (c) 41 two- bedroom units; and (d) 4 three - bedroom units. Notwithstanding anything to the contrary elsewhere in this Agreement, all of the Condominium Units may be sold or leased by Developer at market prices or rents, as applicable. The Condominium Units, if leased to tenants, shall not be deemed to be Rental Housing Units for any purpose under this Agreement. 2.2.8 Parking. A two - level, subterranean parking garage would contain no less than the number of parking spaces required by the Bergamot Area Plan, if adopted by the City prior to the date Developer submits an application for a building permit for the Project, or 635 spaces otherwise, and would contain no more than 799 spaces. The garage would be a single, integrated parking garage, serving the entire Project and providing some parking spaces for the benefit of the Residual Parcel (in accordance with the terms of this Agreement). Each residential unit in the Project (whether a Condominium Unit or an apartment unit) shall be offered at least one designated parking space in the Project, at the time the residential unit is leased or sold unless unbundled in accordance with Section 2.6.2(m)(i)(9) of this Agreement. The parking garage may include tandem parking spaces on the lower level of the parking garage to serve all of the residential units in the Project, such that two parking stalls may be arranged as tandem stalls, as generally depicted on the Project Plans. The PI parking level shall not be permitted to have any tandem parking spaces. If the New Road is expanded pursuant to Section 2.6.2(d) below, then the New Road may include on- street public parking spaces to be located on the western boundary of the site. The Pennsylvania Avenue Extension may also include on- street public parking spaces. The public street parking spaces in the New Road or in the Pennsylvania Avenue Extension shall not be included in the Project's parking count. 40 of the subterranean parking spaces shall be subject to the easement in favor of the Residual Parcel required by Section 2.10 of this Agreement. 2.2.9 Plaza Areas. Courtyard /plaza areas and a pedestrian paseo will be provided within the Property. 2.2.10 Pennsylvania Avenue Extension. A portion of the Property will be improved with an extension of Pennsylvania Avenue that would be oriented east -west across the Property from Stanford Street to the westerly edge of the Property. This extension of Pennsylvania Avenue will be dedicated to the City in accordance with the terms of this Agreement. 2.2.11 New Road. A portion of the Property will be improved with a new road area that would be oriented north -south across the Property along the western border of the Property, from Colorado Avenue to the southerly edge of the Property. This road area will be dedicated to the City in accordance with the terms of this Agreement. 2.2.12 Transfer of Residual Parcel to the City or Its Designee. Developer shall convey to the City or to any entity designated by the City fee title to the Residual Parcel, pursuant to the requirements of Section 2.6.2(n) below. 2.2.13 Resident Relocation Benefits. Prior to issuance of a building permit for the Project, Developer shall comply with those requirements of the VTP Resident Relocation Program set forth in Exhibit "K" attached hereto that can be completed prior to commencement of construction of the Project. Developer shall comply with the remaining elements of the VTP Resident Relocation Program in accordance with the milestones set forth for such elements in Exhibit "K" attached hereto. 10 2.3 No Obligation to Develop. 2.3.1 Except as specifically provided herein: a) Nothing in this Agreement shall be construed to require Developer to proceed with the construction of the Project or any portion thereof. b) The decision to proceed or to forbear or delay in proceeding with construction of the Project or any portion thereof shall be in Developer's sole discretion. C) Failure by Developer to proceed with construction of the Project or any portion thereof shall not give rise to any liability, claim for damages or cause of action against Developer, except as may arise pursuant to a nuisance abatement proceeding under SMMC Chapter 8.96, or any successor legislation. 2.3.2 Failure by Developer to proceed with construction of the Project or any portion thereof shall not result in any loss or diminution of development rights, except upon expiration of Developer's vested rights pursuant to this Agreement, or the termination of this Agreement. 2.3.3 Notwithstanding any provision of this Section 2.3 to the contrary, Developer shall be required to implement all mitigation measures and conditions required under this Agreement in accordance with Exhibit "D" and the Tenant Relocation Plan set forth on Exhibit "K ". 2.4 Vested Rights. 2.4.1 Approval of Project Plans. The City hereby approves the Project Plans. The City shall maintain a complete copy of the Project Plans, stamped "Approved" by the City, in the Office of the City Clerk, and Developer shall maintain a complete copy of the Project Plans, stamped "Approved" by the City, in its offices or at the Project site. The Project Plans to be maintained by the City and Developer shall be in a half -size set. Further detailed plans for the construction of the Building and improvements, including, without limitation, structural plans and working drawings shall be prepared by Developer subsequent to the Effective Date based upon the Project Plans. 2.4.2 Minor Modifications to Project. Developer with the approval of the Planning Director, may make minor changes to the Project or Project Plans ( "Minor Modifications ") without amending this Agreement; provided that the Planning Director makes the following specific findings that the Minor Modifications: (i) are consistent with the Project's approvals as approved by the City Council; (ii) are consistent with the provisions, purposes and goals of this Agreement; (iii) are not detrimental to the public health, safety, convenience or general welfare; and (iv) will not significantly and adversely affect the public benefits associated with the Project. The Planning Director shall notify the Planning Commission in writing of any Minor Modifications approved pursuant to this Section 2.4.2. 11 2.4.3 Modifications Requiring Amendment to this Agreement. Developer shall not make any "Major Modifications" (defined below) to the Project without first amending this Agreement to permit such Major Modifications. A "Major Modification" means the following: a) Reduction of any setback of the Project, as depicted on the Project Plans, if by such reduction the applicable setback would be less than is permitted in the applicable zoning district under the Zoning Ordinance in effect on the date such modification is applied for by more than twenty percent (20 %) of the dimension of such setback; b) Any change in use not consistent with the permitted uses defined in Section 2.5 below; C) Any increase in the number of residential dwelling units in excess of 377 dwelling units; d) Any reduction in the number of Affordable Units that are part of the Rental Housing Units; e) Any decrease in the neighborhood- serving retail component of the project below 20,700 square feet. f) Any decrease in the number of parking spaces such that the aggregate number of parking spaces in the Project, after such reduction, would be less than the minimum number of spaces established by the Bergamot Area Plan, if adopted by the City by the date Developer requests such Major Modification, or 635 otherwise. Additionally, any such request shall (i) be supported by a Developer - prepared written report that demonstrates that the proposed, reduced number of parking spaces will meet the Project's peak parking demand and (ii) Developer shall obtain the Planning Director's approval of such report. g) Any increase in the number of parking spaces above 799 parking spaces; h) Any material change in the number or location of curb cuts shown on the Project Plans; i) Any variation in the design, massing or building configuration, including but not limited to, floor area and building height, that renders such aspects out of substantial compliance with the Project Plans after ARB Approval; and j) Any change that would materially reduce the community benefits as set forth in Section 2.6. 12 If a proposed modification does not exceed the Major Modification thresholds established above, then the proposed modification may be reviewed in accordance with Section 2.4.2. 2.4.4 City Consent to Modification. If the City's consent is required for a Minor Modification, the Planning Director shall not unreasonably withhold, condition, or delay its approval of a request for such Minor Modification. The City may impose fees, exactions, conditions, and mitigation measures in connection with its approval of a Minor or Major Modification, subject to any applicable law. Notwithstanding anything to the contrary herein or in the Existing Regulations, if the Planning Director approves a Minor Modification or if the City approves a Major Modification (and the corresponding amendment to this Agreement for such Major Modification), as the case may be, Developer shall not be required to obtain any other Discretionary Approvals for such modification, except for ARB approval, in the case of certain Major Modifications. 2.4.5 Right to Develop. Subject to the provisions of Section 3.3 below, during the Term (as defined in Section 9.2 below) of this Development Agreement, Developer shall have the vested rights (the "Vested Rights ") to (a) develop and construct the Project in accordance with the following: (i) the Project Plans (as the same may be modified from time to time in accordance with this Agreement); (ii) any Minor Modifications approved in accordance with Section 2.4.2; (iii) any Major Modifications which are approved pursuant to Section 2.4.3 above; (iv) a tentative and final tract map that is prepared and approved at any time during the Term of this Agreement in accordance with the provisions of Chapter 9.20 of the Zoning Ordinance as the same exist on the date of this Agreement, provided that such tentative and final tract map is otherwise in substantial compliance with the development standards established by this Agreement; and (v) the requirements and obligations of Developer related to the improvements which are specifically set forth in this Agreement, and (b) use and occupy the Project for the permitted uses set forth in Section 2.5. Except for any required approvals from the ARB pursuant to Section 6.1 of this Agreement, the City shall have no further discretion over the elements of the Project which have been delineated in the Project Plans (as the same may be modified from time to time in accordance with this Agreement). Notwithstanding anything to the contrary in Zoning Ordinance, the Tract Map shall remain valid for the Term of this Agreement, until final tract maps are recorded for the Property in accordance with the requirements of Chapter 9.20 of the Zoning Ordinance. 2.4.6 Foundation Only Building Permit. ermit. Section 8.08.070(b) of the Zoning Code allows for issuance of partial permits for portions of a structure. Developer may submit an application for a Foundation Only Permit, which application shall be processed according to the Division of Building and Safety's Foundation Only Permit policy (PT- 05 -03). 2.5 Permitted Uses. The Parties acknowledge that the City is in the process of updating the Zoning Ordinance, and the Parties agree that, upon the City's adoption of the new Zoning Ordinance, the Developer may make a one -time election whether to have the Permitted Uses as contained in this Agreement or as identified in the zoning district 13 where the Project is located in the City's new zoning ordinance. Pursuant to this Agreement, Permitted Uses in the Project shall be as specified below: a) Residential uses, both for -rent and for -sale; b) Enclosed entertainment- related facilities including, without limitation, movie studios and production facilities, distribution facilities, editing facilities, catering facilities, printing facilities, post - production facilities, set construction facilities, sound studios, special effects facilities and other entertainment- related production operations; C) Broadcasting /communications, telecommunications facilities, and ancillary facilities customarily associated with and incidental to such production facilities, including, without limitation, facilities for broadcasting, transmitting, distributing, recording, receiving, editing, and creating broadcast/communications and telecommunications; d) On -site production facilities for advertising purposes; e) All uses customary or incidental to the production or distribution of motion pictures, electronic games, and all other forms of aural, audio /visual and /or multi -media products; 0 Software and other computer - related production facilities; g) Internet and /or "web" based businesses such as internet service providers, search engine companies, social media companies, and the like; h) Neighborhood serving businesses such as restaurants, sidewalk cafes, yoga studios, fitness centers, and other activity -based businesses; and i) Small -scale general or specialty stores that furnish goods and services primarily to residents of the neighborhood; provided that the aggregate Floor Area for all retail uses does not exceed 24,940 square feet. j) Uses that are directly related to, supportive of, and ancillary to a permitted use ( "ancillary uses "), including without limitation storage areas for use by residential tenants or owners, administrative office, production management, marketing, promotion, licensing, acquisition, sales, leasing, financing, accounting, legal, professional services, creative services, transmission facilities, catering offices and kitchens; and subterranean parking for primary and ancillary uses. The Project may include up to 50% ancillary uses associated with primary permitted uses. General office uses that are not directly related to, or ancillary uses to a primary use of a building or suite, are prohibited. 2.5.1 Ground Floor Uses. Ground floor uses facing Colorado Avenue and New Road shall be Pedestrian - Oriented Uses. Ground floor uses facing Pennsylvania Avenue shall be Pedestrian- Oriented Uses or may be designed with Pedestrian - Oriented Design. 14 2.6 Significant Project Features and LUCE Community Benefits. This Agreement provides assurances that the significant project features and LUCE community benefits identified below in this Section 2.6 will be achieved and developed in accordance with the terms of this Agreement. 2.6.1 Significant Project Features. Set forth below in this Section 2.6.1 are the project features that will be provided to the City, including without limitation: a) Increasing the supply of affordable housing units in the City through the inclusion of 16 Affordable Units in the Project, provisions for the land donation and affordable deed restriction of the Residual Parcel, all of which in the aggregate are intended to be the equivalent of compliance with the requirements of the City's Affordable Housing Production Program (except for certain unit size requirements); b) Increased tax revenues; C) Enhancing the Mixed Use Creative district with a well - designed mixed -use project; d) An estimated 976 new, temporary, design and construction jobs within the City; e) Reducing vehicle trips by implementing a TDM program that takes advantage of the future completion of the Expo Line and other modes of transportation that are alternatives to the automobile; f) Sustainable Design Features. Developer shall retain the services of an accredited professional to consult with Developer regarding inclusion of sustainable design features for the Project. Developer shall design the Project so that the Project shall achieve LEED® certification at a minimum "Silver" level under the LEEDOO Rating System (the "Sustainable Design Status ") from the Green Building Certification Institute (GBCI). The Project may achieve LEED® certification through any LEED® rating system for which the Project is eligible as determined by the GCBI, including LEED -New Construction, LEED -Core and Shell, LEED - Commercial Interiors, LEED- Homes, or LEED - Schools, but excluding LEED- Existing Buildings, Operations & Maintenance. The Project shall register for the LEED© rating system in effect at the time of application for review by the Architectural Review Board. i) Developer shall confirm to the City that the design for the Project has achieved the Sustainable Design Status in accordance with the following requirements of this Section 2.6.1(f)(i): 1) Prior to the submission of plans for ARB review, Developer shall submit a preliminary checklist of anticipated LEED® credits (that shall be prepared by the LEED® accredited professional) for review by the City of Santa Monica Green Building Program Advisor. The Developer shall retain the services 15 of a third party, independent individual designated to organize, lead, and review the completion of the process of verifying and documenting that a building and all of its systems and assemblies are planned, designed, installed, and tested to meet the owner's project requirements (the "Commissioning Authority "). Prior to issuance of a building permit, the Developer shall have the Commissioning Authority review the Owner's Project Requirements, the Basis of Design, and the Design Documents. 2) Prior to issuance of a final Certificate of Occupancy for the Project, the Developer shall demonstrate that the Project has achieved the Sustainable Design Status. 3) Notwithstanding the foregoing, if the Developer has not yet demonstrated that the constructed Project has achieved the Sustainable Design Status, the City shall nonetheless issue a temporary Certificate of Occupancy for the Project (assuming that the Project is otherwise entitled to receive a temporary Certificate of Occupancy). The temporary Certificate of Occupancy shall be converted to a final Certificate of Occupancy once the Project has achieved the Sustainable Design Status. ii) Approximately 1,500 square feet in the aggregate of photovoltaic panels shall be located on the roof of Building A, as well as the roofs of the gyro and cabana structures that are part of Building A in accordance with the Project Plans. g) Shared Parking. In furtherance of the LUCE's shared parking policies, the Project shall implement the following provisions regarding shared parking spaces. At all times during the operation of the Project, Developer shall cause 162 of the parking spaces (the "Unreserved Spaces ") provided in the Project to be shared among (i) commercial visitors, all guests for residential units, and any commercial tenants and their employees and (ii) any residential occupant of the Project who desires to lease additional unreserved parking spaces in connection with his or her residential unit. The Unreserved Spaces shall be shared on a first -come, first- served basis. 30 of the spaces that are part of the parking easement in favor of the Residual Parcel, pursuant to Section 2.10 of this Agreement, may also be included in the Unreserved Spaces. However, any leases for those 30 spaces shall be terminated with 1 -week written notice from the Developer prior to the date that the Residual Parcel is developed with a residential project that requires off -site parking spaces. So long as there are a sufficient number of on -site parking spaces for residents, commercial tenants, and their respective guests and visitors, Developer may lease any unused on -site parking spaces from the Unreserved Spaces and the Residential Unbundled Spaces ( "Excess Spaces ") to third parties in need of parking. Parking shall be charged at market rental rates established by Developer from time -to -time and in accordance with the following pricing parameters: hourly, daily, and monthly rates shall be noncompetitive with the price of comparable public transit fares and/or passes and ii) the City shall ensure compliance with this provision as part of the annual compliance report required as part of this Agreement. Prior to making any Excess Spaces available to third parties, (i) Developer shall obtain a written report by a traffic and parking engineering firm that demonstrates that Excess 16 Spaces are not required to meet the Project's peak parking demand, and (ii) Developer shall obtain the Planning Director's approval of such report. Alternatively, Developer may seek City approval for any type of proposed shared parking arrangement in accordance with any City procedure in effect at the time Developer requests approval for a shared parking arrangement. h) Electrical Vehicle Conduit. Developer shall cause one of the subterranean levels of the parking garage in the Project to include electric panel capacity, conduit and stub -outs that will accept electric wiring to provide power to not less than 30 parking spaces. The panel capacity, conduit size and stub -outs shall be designed to allow for the simultaneous charging of 208/240 V 40 amp grounded AC electrical outlets to a minimum of 30 parking spaces. Until the Planning Director makes a determination, based on demonstrated demand by drivers of such vehicles, that some or all of the 30 parking spaces be restricted for electric or other alternative fueled vehicle use, the spaces may be utilized without regard to vehicle type at the Developer's sole and absolute discretion. i) Subiecting 99 Rental Housing Units (but none of the Condominium Units) in Buildine C to the Citv's Rent Control Law (Article XVIII of the City Charter), including the Affordable Units. Developer shall comply with all applicable rent control rules and regulations established from time to time by the City's Rent Control Board, with respect to 99 of the Rental Housing Units in Building C. 2.6.2 LUCE Community Benefits. Set forth below in this Section 2.6.2 are the additional community benefits that will be provided by the Project. a) Enhanced Plaza Areas and Enhanced Walkway Area Developer shall construct the plaza areas and the walkway areas with enhanced landscaping throughout the Project that are identified on the Project Plans as either `Residential Open Space' (the "Residential Open Space ") or `General Open Space' (the "General Open Space "), all as depicted on "Exhibit G -3" attached hereto. The Residential Open Space and the General Open Space are sometimes collectively referred to as the "Public Use Areas." Developer, at its option, may also include in the Project a walking or jogging pathway through portions of the Project that may connect to similar paths on adjacent properties (the "Exercise Paths "). If and to the extent that the Exercise Paths are constructed as part of the Project, the Exercise Paths shall be considered part of the Public Use Areas. Developer shall make the Residential Open Space accessible to the public from 7:00 a.m. through 7:00 p.m. each day. Developer shall make the General Open Space accessible to the public from 7:00 a.m. through 10:00 p.m. each day. Developer shall make the Accessible Green Space accessible to the public from 7:00 a.m. through 7:00 p.m. each day. Except as approved by the Planning Director, which approval will not be unreasonably withheld or delayed, no physical or visual barrier shall be used to limit access to Public Use Areas during the time periods designated for public access. The public use of the Public Use Areas shall be: (i) consistent with the terms and conditions of this Agreement; (ii) solely for pedestrian access to and passive use of the Public Use Areas by the public including walking, strolling, reading and other similar activity (with no obligation to buy any goods or services during such hours); and (iii) 17 compatible with Developer's development, use and enjoyment of the Project. No use other than pedestrian access to and passive use of the Public Use Areas by the public shall be permitted on the Public Use Areas. Developer shall have the right to impose and enforce reasonable rules and regulations regarding the use of the Public Use Areas by the public (the "Public Use Rules "); provided that the Planning Director may approve the Public Use Rules, which approval shall not be unreasonably withheld, conditioned or delayed. Developer may exclude individuals from the Public Use Areas who do not comply with such rules and regulations. The City agrees that the Public Use Areas and other open space set forth in the Project Plans satisfies the City's requirements for both public and private open space. If there are any inconsistencies between the Zoning Code and the open space requirements set forth in this Agreement, the open space requirements established by this Agreement shall prevail. b) Prohibited Activities on the Public Use Areas. The Public Use Rules may prohibit certain uses incompatible with the Project, including without limitation any of the following: (i) cooking, dispensing or preparing food; (ii) selling any item or engaging in the solicitation of money, signatures, or other goods or services; (iii) sleeping or staying overnight; (iv) using sound amplifying equipment; or (v) engaging in any illegal, dangerous or other activity that Developer reasonably deems to be inconsistent with other uses in the Project or with the use of the Public Use Areas by other members of the public for the permitted purposes, such as excessive noise or boisterous activity, bicycle or skateboard riding, skating or similar activity, being intoxicated, having offensive bodily hygiene, having shopping carts or other wheeled conveyances (except for wheelchairs and baby strollers /carriages), and Developer shall retain the right to cause persons engaging in such conduct to be removed from the Project. Should any such persons refuse to leave the Project, they shall be deemed to be trespassing and be subject to arrest in accordance with applicable law. Developer shall be entitled to establish and post rules and regulations for use of the Public Use Areas consistent with the foregoing, which shall be subject to approval by the Planning Director, and which approval will not be unreasonably withheld or delayed. Nothing in this Agreement or in the Project Plans shall be deemed to mean that the Public Use Areas are public parks or are subject to legal requirements applicable to a public park or other public space. The Public Use Areas shall remain the private property of Developer with members of the public having only a license to occupy and use the Public Use Areas in a manner consistent with this Section 2.6.2(a) and (b). C) Pennsylvania Avenue Extension. Prior to issuance of a certificate of occupancy, Developer shall, at its sole cost and expense, dedicate, improve and complete construction of public street, from the easterly boundary of the Property to the westerly boundary of the Property, that would be the easterly extension of Pennsylvania Avenue (the "Pennsylvania Avenue Extension "), containing approximately 20,290 square feet as depicted on Exhibit "G -1" attached hereto (such land area being referred to as the "Pennsylvania Avenue Extension Easement Area "). The roadway width will be sixty -two feet (62') wide for approximately the 238 lineal feet (238') of westerly most portion of the Pennsylvania Avenue Extension and the roadway will be forty -nine feet five inches (49' 5 ") wide for the remaining portion of the Pennsylvania Avenue Extension, as depicted on Exhibit "G -1 ". For that portion of the 18 Pennsylvania Avenue Extension that will be sixty -two feet wide, Developer shall complete such portion including but not limited to all curbs, gutters and sidewalks in accordance with streetscape standards as established in the Bergamot Area Plan on both sides of such street. For that portion of the Pennsylvania Avenue Extension that will be forty -six and one -half feet wide, Developer shall complete such portion including but not limited to all curbs, gutters and sidewalks in accordance with streetscape standards as established in the Bergamot Area Plan on both sides of such street. The Pennsylvania Avenue Extension shall be dedicated, constructed, and completed in accordance with Condition of Approval No. 80 in Section B of Exhibit "D" to this Agreement and in accordance with the current regulations and codes governing the construction of public streets in the City. Developer shall dedicate to the City (i) the surface area of the Pennsylvania Avenue Extension Easement Area for public street purposes and (ii) the Pennsylvania Avenue Utility Corridors (as defined in Condition of Approval No. 80 in Section B of Exhibit "D" to this Agreement), while expressly reserving to Developer all other subterranean rights. The dedication of the surface portion of the Property contained within the Pennsylvania Avenue Extension Easement Area shall give the City the ability to install parking meters, fire hydrants, maintain street signage, and repair and maintain the roadway in accordance with applicable road maintenance standards within the City. Other than the City's right to use the Pennsylvania Avenue Utility Corridor, the dedication of the portion of the Property contained within the Pennsylvania Avenue Extension Easement Area shall not grant to the City any other rights below the surface of the street for the installation, repair or maintenance of any utility equipment or facilities, such as storm water, sewer, electricity, telephone or other uses. Following City's acceptance of the dedication of the Pennsylvania Avenue Extension Easement Area, Developer's subterranean use of the Pennsylvania Avenue Extension Easement Area shall not materially impact or interfere with the City's use of the surface of such area as a public street or the City's use of the Pennsylvania Avenue Utility Corridor. Prior to such acceptance, Developer shall have the exclusive right to use the Pennsylvania Avenue Extension Easement Area. If the Pennsylvania Avenue Extension Easement Area ever ceases to be used as a public street, the ownership of the Pennsylvania Avenue Extension Easement Area shall revert to Developer. d) New Road. Prior to issuance of a certificate of occupancy, Developer shall, at its sole cost and expense, dedicate, improve and complete construction of a twenty -two foot (22') wide roadway on the western border of the Property from Colorado Avenue to the southeasterly Property line (the "New Road "). The New Road would be comprised of one travel lane (from Colorado Boulevard southeasterly toward the southeasterly boundary of the Property) and sidewalks, but no parking lanes, and the New Road would provide access into the Property, all as depicted on Exhibit "G -2" (the "Primary Access Plan ") attached hereto. The twenty -two foot (22') wide land area that contains approximately 14,080 square feet is referred to as the "New Road Basement Area ". The New Road Easement Area shall be completed by Developer constructing a roadway that will be approximately twenty -two (22') wide (that may include curbs, gutters and sidewalk) on the northeasterly side of the New Road, as generally depicted on the Primary Access Plan. The New Road also shall be constructed, and completed in accordance with Condition of Approval No. 81 in Section B of Exhibit "D" to this Agreement and in accordance with the current regulations and codes 19 governing the construction of public streets in the City. Developer shall dedicate to the City (i) the surface area of the New Road Easement Area for public street purposes and (ii) the New Road Utility Corridors (as defined in Condition of Approval No. 81 in Section B of Exhibit "D" to this Agreement), while expressly reserving to Developer all other subterranean rights. The dedication of the surface portion of the Property contained within the New Road Easement Area shall give the City the ability to maintain street signage and repair and maintain the roadway in accordance with applicable road maintenance standards within the City. Other than the City's right to use the New Road Utility Corridor, the dedication of the portion of the Property contained within the New Road Easement Area shall not grant to the City any other rights below the surface of the street for the installation, repair or maintenance of any utility equipment or facilities, such as storm water, sewer, electricity, telephone or other uses. Following City's acceptance of the dedication of the New Road Easement Area, Developer's subterranean use of the New Road Easement Area shall not materially impact or interfere with the City's use of the surface of such area as a public street or the City's use of the New Road Utility Corridor. Prior to such acceptance, Developer shall have the exclusive right to use the New Road Easement Area. If the New Road Easement Area ever ceases to be used as a public street, the ownership of the New Road Easement Area shall revert to Developer. e) New Road — Cooperation with Adjacent Property. The property located at 2848 -2912 Colorado Avenue, situated directly to the southwest of the Property (the "Adjacent Property ") is under consideration for redevelopment. The proposed development for the Adjacent Property may also include the development of an extension of Pennsylvania Avenue through the Adjacent Property as well as a north -south roadway expansion of the New Road that would be developed as an integrated roadway together with the New Road. If Developer commences construction of the Project after the project on the Adjacent Property has completed construction of a roadway that is adjacent to the New Road Easement Area, then Developer shall cooperate with the City and the owner of the Adjacent Property to cause the construction of the expanded New Road to become part of the adjacent roadway improvements on the Adjacent Property, so that the two combined roadway improvement areas are up to sixty -two (62') wide from the north property line to the south property line; provided that the New Road Easement Area shall not be wider than twenty -two feet (22'). In addition, if such widening of the New Road occurs, the City shall work with the Adjacent Property owner to try and cause the Adjacent Property Owner to cooperate with Developer (at no cost or expense to Developer) so that Developer may improve and complete construction of New Road in accordance with streetscape standards adopted as part of the Bergamot Area Plan together with any roadway repair that may also be required at such time on the New Road Easement Area as may be required by the City. If Developer commences construction of the Project after the project on the Adjacent Property has completed construction of a roadway that is adjacent to the New Road Easement Area, then Developer shall be obligated to do the following at no cost to Adjacent Property owner: (i) construct, and complete such roadway improvements on the Adjacent Property that are necessary to integrate the New Road with the other previously completed roadway improvements, all in accordance with Condition of Approval No. 81 in Section B of Exhibit "D" to this Agreement and in accordance with the then - current regulations and codes governing the construction of public streets in the City, and (ii) make any repairs that may be required 20 to the project constructed on the Adjacent Property that may be required after completion of the Developer's roadway work. If owner of the Adjacent Property commences construction of an expanded street that would integrate the New Road after Developer has completed construction of the New Road, then Developer shall cooperate with the City and the owner of the Adjacent Property to cause the construction of the New Road to become part of the adjacent roadway improvements on the Adjacent Property, so that the two combined roadway improvement areas could be up to sixty -two feet (62') wide from the north property line to the south property line. In addition, if such widening of the New Road occurs, Developer shall provide any cooperation required (at no cost or expense to Developer) to allow the Adjacent Property owner to improve and complete construction of New Road in accordance with streetscape standards adopted as part of the Bergamot Area Plan together with any roadway repair that may also be required at such time on the New Road Easement Area as may be required by the City. The City shall cause the Adjacent Property owner to dedicate, construct, and complete roadway improvements on the Adjacent Property that will integrate the New Road in accordance with Condition of Approval No. 81 in Section B of Exhibit "D" to this Agreement and in accordance with the then - current regulations and codes governing the construction of public streets in the City. The City shall also cause the Adjacent Property owner, at no cost to Developer, to make any repairs that may be required to the Project as a result of such roadway work. f) Childcare Subsidy. Prior to issuance of Certificate of Occupancy for the first building in the Project, Developer shall create a separate, interest - bearing trust fund and make a contribution in the amount of $179,000. The required childcare linkage fee that would otherwise be payable in accordance with Chapter 9.72 of the Zoning Ordinance is $174,000 is being voluntarily applied by the Developer towards the childcare subsidy. The contribution shall be made and distributed in accordance with an application process to be approved by the Planning Director. The contribution shall be used exclusively to provide subsidies to persons using childcare services in the City. When awarding childcare grants or subsidies, first priority should be given to low - income households with consideration given to family size, income and need. Subject to the foregoing, preference should be given to Pico Neighborhood residents. g) Contribution for Services for Senior and Disabled Persons and Families with Minor Children. Prior to the date on which Developer delivers the closure notice pursuant to Section 5.6.2 below, Developer shall create a separate, interest - bearing trust fund and make a contribution in the amount of $350,000. The contribution available in this trust fund shall be used exclusively to provide subsidies to entities providing services in the City to seniors, disabled persons, and to families with minor children. The contribution available in this trust fund shall be distributed in accordance with a process, to be established by the Planning Director, whereby those entities that can provide services to persons entitled to relocation assistance under the Relocation Plan attached to this Agreement as Exhibit "K" (which persons are also seniors, disabled persons, and/or families with minor children), may make an application to receive distribution of the trust funds. When awarding grants or subsidies to the approved entities providing services, first priority should be given to entities that will provide the 21 broadest range of services to address the needs of seniors, disabled persons, and families with minor children residing within the Village Trailer Park. h) Transportation Infrastructure Fee. On or before issuance of a building permit for the Project, Developer shall make a contribution to the City in the amount of $1,650,000, to be used by the City within five years thereafter, subject to extensions authorized pursuant to applicable law, for the purposes of helping fund capital improvements to transportation infrastructure that may include but not be limited to pedestrian network completion, bicycle facilities as guided by the Bicycle Action Plan, transit improvements, and automobile network improvements. i) Local Hiring. A local hiring program shall be provided in accordance with Exhibits "F -1" and "F -2 ". j) Bicycle Sharing Area. Developer shall provide a reasonable amount of space in the Public Use Area, not to exceed ten (10) feet in depth and twenty -five (25) feet in width, at a visible and accessible location on -site which is compatible with the operation of the Project, for a bicycle sharing program station in conjunction with any bicycle sharing program instituted by the City or another operator. Developer shall have the right to relocate the area made available for such bicycle sharing station from time to time so long as the new location continues to be visible from the street and of a similar size given the requirements of the bicycle sharing program. Any changes to size and location will require approval by the Planning Director. Developer shall have no obligation to fund or operate any such program or to keep any space available if no bicycle sharing system is implemented by the City or other operator. If the City requests that Developer install a bicycle sharing program station, such station may replace no more than 7 publically accessible bicycle rack spaces required in the "TDM Plan" (defined below in Section 2.6.2(m)); provided that Developer shall use its commercially reasonable efforts to relocate the publically accessible bicycle racks to another location on the Property. If relocation of the publically accessible bicycle racks on the Property is not feasible, then Developer shall cooperate with the City to install bicycle racks in the portions of the City's public right of way designated by the City. In such case, Developer shall be responsible to purchase and install bicycle racks in the public right of way, in a number equal to the publically accessible bicycle racks that were removed to accommodate the bicycle sharing program station. k) Car Sharing Service. Developer shall, in the subterranean parking garage, make a car sharing service available within the Project with a minimum of two shared -use cars, if such a service is available from a third party provider on commercially reasonable terms including the rental rate to be paid to Developer for use of the parking spaces. Required parking spaces may be used for carshare vehicles. Developer shall propose a signage system to notify people of the location and availability of the carshare vehicles; the City Transportation Manager shall consider such request and may authorize the posting of signs within the public right -of -way to guide pedestrian and vehicular traffic to the carshare parking location. Location of carshare vehicles shall be determined by the Planning Director in consultation with the Developer, at such time as the carsbare service provider has been selected. 22 1) Parking District Management. The City intends to develop a parking district management program for the neighborhood surrounding the Property to allow for the shared use of parking spaces in the Project and on other properties. If the City implements a parking district management program that includes the Project site, Developer will participate in such program in a commercially reasonable manner and commensurate with the participation of the other projects that are within the parking district. m) Enhanced TDM Elements. The Transportation Demand Management Plan (the "TDM Plan ") set forth below includes elements of a transportation demand management plan required by the Zoning Ordinance. In addition, Developer shall provide those elements which exceed the requirements of the Zoning Ordinance. During operation of the Project, Developer shall comply with the requirements of the TDM Plan and shall make the TDM Plan available in the on -site information required in Section 2.6.2(m)(i)(6). i) TDM Measures Applicable to the Entire Project. 1) Peak Hour Trip Requirements. The Project shall take steps to generate not more than 111 AM weekday peak hour trips and more than 140 PM weekday peak hour trips (the "Peak Daily Trips "), as estimated for the Project in the Recirculated EIR. Developer's failure to achieve the Peak Hour Trip Requirements shall not constitute a default under this Agreement. 2) Annual Status Report. Developer shall, beginning with the first annual reporting date assigned by the City, report on the TDM Plan. The report shall be submitted in accordance with a format established by the City and shall include information sufficient to determine compliance with all aspects of the TDM Plan required by this Section 2.6.2(m). 3) Annual Peak Daily Trips Monitoring. Developer shall, at least once each calendar year (commencing during the second calendar year following the year in which the final certificate of occupancy for the Project is issued), conduct a two -day trip count survey at the Project, counting the number of vehicles entering and exiting the Project driveways, together with observation of vehicles picking up and /or dropping off persons entering or leaving the Project. At the same time that trip count survey occurs, Developer shall also conduct a one -day cordon count that positively counts all persons arriving to the project by foot, bicycle, and automobile. The counts shall be conducted by an independent third party, reasonably approved by the City. If any annual trip count report shows that the actual average daily am peak trips and /or pm peak trips exceed the Peak Daily Trips, then Developer shall propose modifications to the TDM program that Developer considers likely to allow the Project to achieve actual average daily trip counts that are less than the Peak Daily Trips by the date of the next annual trip count survey. Any such modifications to the TDM shall be subject to the reasonable approval by the City's Planning Director as a Minor Modification. The actual average daily AM peak trips and /or PM peak trips for the Project shall be monitored each year during the term of this Agreement. Develop may 23 also elect to have the City conduct the monitoring required by this Section 2.6.2(m)(i)(3) and shall reimburse City for all reasonable costs associated with such monitoring. 4) Trip Generation Measurement. Developer shall implement a key card entry system for on -site parking that will differentiate between residential, commercial, and off -site users. PM peak trip generation shall be measured by counting the number of parking users that use a residential or commercial key card to exit the garage during PM peak hours. In an effort to encourage shared parking, off -site users exiting during peak hours will not be counted towards peak trip generation. Vehicles exiting that area part of a car - sharing service will not be counted towards peak trip generation counts. Peak trip generation shall be measured over a normal consecutive two -day period (excluding weekends or holidays). The two -day average PM peak period counts shall be compared against the Trip Generation Reduction Target 5) Transportation Demand Mana eg ment Association. Developer and building tenants shall participate in a Transportation Demand Management Association (TMA). As part of the LUCE Update process, the City has identified that a TMA should be established for the Bergamot area. TMAs would provide employees, businesses, visitors and residents of an area with resources to increase the amount of trips taken by transit, walking, bicycling, and.ridesharing. The property owner shall attend organizational meetings, provide traffic demand data to the TMA, and make available information to its tenants relative to the services provided by the TMA. Developer shall make a one -time contribution prior to issuance of Certificate of Occupancy for the first building on -site in the amount of $50,000 towards the formation of the TMA. Developer will pay annual dues applied proportionally to all members of the TMA. At the discretion of the Developer to be approved by the Planning Director, elements incorporated under this TDM Plan may be incorporated into the TMA. 6) Transportation Information Center. Developer shall provide on -site information for employees, residents, and visitors about transportation reduction alternatives available to occupants of the project, such as the following: (i) guidance on public transit routes (including bus lines, light rail lines, bus fare programs, ride share programs, and shuttles) to and from the Project and bicycle facilities (including routes, rental and sales locations, on -site bicycle racks and showers for use by tenants of the Project); (ii) walking and biking maps for visitors, which shall include but not be limited to information about local services and restaurants within walking distance of the Project; (iii) information regarding local rental housing agencies; (iv) coordination of vanpool and carpool formation; (v) the existence of any City - sponsored programs such as ride -to- work -week, ride share events, pit stop programs, and the like; and (vi) the availability at the time of such meeting of third party car - sharing services such as Nu -ride and Zim -ride. Developer may elect to provide this information on a website or other electronic media. 7) TDM Plan Coordinator. A TDM Plan Coordinator shall be designated for this Project by the Developer. The TDM Plan Coordinator shall manage all aspects of this TDM Plan and participate in City - sponsored 24 workshops and information roundtables. As the Project is expected to be occupied by multiple users, including a large residential component, Developer shall participate in the Bergamot area TMA to encourage the implementation of TDM strategies for all occupants of the Project. The TDM Coordinator shall be responsible for making available information materials on options for alternative transportation modes and opportunities. In addition, transit fare media and day /month passes will be made . available through the TDM Coordinator to employees, visitors, and residents during typical business hours. Developer shall inform residential tenants leasing units in Rental Housing Units (but not to owners or tenants of the Condominium Units) that they may elect to forego their parking space in exchange for a subsidized transit pass. 8) Unbundled Parking — Commercial Tenants. Developer shall offer to lease the Unreserved Parking Spaces in the Project to commercial tenants separately from the commercial space. All commercial tenants of the Project may, at their option, enter into leases with limited or no parking spaces as part of their respective leases. If commercial tenants desire to lease parking, parking shall either be leased pursuant to a separate agreement or shown as a separate line item in the lease. Such parking shall be leased at market rates established by Developer from time -to -time. Not less frequently than once each calendar quarter, Developer shall deliver to the City's Transportation Management Office a list of those commercial tenants of the Project who occupy the Project under leases with reduced or no parking spaces. In order to reduce the potential for any parking impacts on surrounding neighborhoods, all commercial tenant occupants of the Project shall not be permitted to obtain Preferential Parking Permits from the City. 9) Unbundled Parking — Residential Tenants. All residential tenants of the Project shall be offered at least one parking space. Residential tenants leasing Rental Housing Units (but not owners or tenants of the Condominium Units or the Affordable Units) may, at their option, enter into leases without a parking space as part of their respective leases. Parking shall be shown as a separate line item in the leases for Rental Housing Units. Each parking space leased to a residential tenant of a Rental Housing Unit shall be leased at market rates established by the Developer from time -to -time in accordance with Section 2.6.1(g). The calculation of monthly rent for Rental Housing Units shall be decreased by the line item amount for a parking space if a residential tenant declines a parking space in exchange for the subsidized transit pass required pursuant to Section 2.6.2(m)(iii)(1). Any parking spaces that are not leased by residential tenants ( "Residential Unbundled Spaces ") may be leased pursuant to Section 2.6.1(g) of this Agreement. Not less frequently than once each calendar quarter, Developer shall deliver to the City's Transportation Management Office a list of those residential tenants of the Project who occupy the Project under leases with reduced or no parking spaces. In order to reduce the potential for any parking impacts on surrounding neighborhoods, all residential tenant occupants of the Project shall not be permitted to obtain Preferential Parking Permits from the City with the exception for one - day guest parking passes. 10) Pedestrian Way finding. The Developer shall provide and maintain a pedestrian wayfinding program directing employees, 25 visitors, and residents to /from the project site and public bus transit, rail transit lines, and bicycle facilities. 11) Visitor Accessible Bicycle Racks. Developer shall provide short -term bicycle parking for 64 bikes for visitors of the Project. This guest bike parking shall be located on the ground floor of the Project and may be relocated from time to time as long as the bicycle parking remains on the ground floor. If short-term bicycle parking cannot be located on the ground floor, it may be located in the subterranean garage in a convenient location approved by the Planning Director. 12) Secure Bicycle Storage for Employees. Developer shall provide secure long -teen bicycle storage for employees in a secure convenient location approved by the Planning Director. This shall have a capacity for a minimum of 5 bicycles. For the put-poses of this requirement, secure bicycle parking shall mean bicycle lockers, an attended cage, or a secure parking area. 13) Secure Bicycle Storage for Residential Tenants and Residential Owners. Developer shall provide secure long -term bicycle storage for residential tenants and owners in a secure convenient location approved by the Planning Director. This shall have a capacity for a minimum of 377 bicycles, which racks and storage areas shall be for the exclusive use of the residential tenants occupying the Rental Housing Units and owners and tenants occupying the Condominium Units. Developer shall provide at least one bicycle storage space for each Rental Housing Unit and for each Condominium Unit in the Project. The bicycle storage racks and spaces shall be available to the occupants of the Rental Housing Units even if such occupants do not lease a parking space pursuant to the unbundled parking element of the TDM Plan set forth above in Section 2.6.2(m)(i)(9). Developer shall also provide a "fix -it" station in the Project that occupants of the Project may use to repair and maintain their bicycles. 14) On -Site Shower and Locker Facilities. A minimum of two showers and locker facilities (one for each gender) shall be provided for employees of commercial uses on site who bicycle or use another active means, powered by human propulsion, of getting to work or who exercise during the work day. ii) TDM Measures applicable to the commercial component only. 1) AVR Requirements. With respect only to the tenants of the commercial space in the Project (and their respective employees) (the "Commercial Occupants "), Developer shall use its commercially reasonable efforts to achieve an average vehicle ridership ( "AVR') for the Commercial Occupants of at least 1.5 (the "AVR Goal ") by the second year after issuance of the Certificate of Occupancy for the Project. Chapter 9.16 of the Santa Monica Municipal Code shall govern how the AVR is calculated for the Commercial Occupants. Within six months after the Certificate of Occupancy is issued for the Project, Developer shall conduct a baseline survey of the AVR for the Project. Developer shall submit such baseline survey to the City at the time of submittal of the first annual compliance report for this Agreement, 26 following the issuance of the Certificate of Occupancy, unless an alternative submittal date is approved by the Planning Director. Thereafter, the City shall monitor the TDM Plan performance as part of the City's Periodic Review for the Project. If, during any annual evaluation of the Project's employee trip reduction plan, the AVR Goal has not been achieved for the Project, then Developer shall propose modifications to the TDM Plan that Developer considers likely to achieve the AVR Goal by the date of the next annual evaluation of the Project's employee trip reduction plan. In addition, the City's Planning Director may recommend feasible modifications to the TDM Plan. Developer's failure to achieve the AVR Goal shall not constitute a default under this Agreement so long as Developer is working cooperatively with the City to achieve compliance. 2) Annual AVR Monitoring. Developer shall conduct a baseline survey of the AVR for the Project, which shall be submitted to the City at the time of submittal of the first annual compliance report following the issuance of the Certificate of Occupancy, unless an alternative submittal date is approved by the Planning Director. Thereafter, the City shall monitor the TDM plan performance as part of the City's Periodic Review for the Project. If, during any annual evaluation of the Project's employee trip reduction plan, the proposed AVR is not obtained by the Project, then Developer shall propose modifications to the TDM program that Developer considers likely to achieve the proposed AVR by the date of the next annual evaluation of the Project's employee trip reduction plan. In addition, the City's Planning Director may recommend feasible modifications to the TDM. Developer's failure to achieve the applicable AVR standard will not constitute a breach or default under this Agreement and shall not give rise to the right of the City to terminate this Agreement; provided that Developer shall work cooperatively with the City to achieve compliance with the applicable AVR standard. Any of the modifications to the TDM proposed by Developer (or proposed by the Planning Director and agreed to by the Developer) to help the Project achieve the applicable AVR standard shall be subject to the reasonable approval by the City's Planning Director as a Minor Modification. The AVR for the Project shall be monitored each year during the term of this Agreement. 3) Transit Pass Subsidy for Commercial Tenants. All commercial tenants of the Project may, at their option, enter into leases with reduced employee parking spaces. The number of employee parking spaces may be reduced by as much as fifty percent (50 %) of the code required parking space for the applicable commercial space; provided that the commercial tenant provides fully subsidized monthly transit passes to the same percentage of employees as the percentage by which the parking spaces are reduced, and such passes are provided for the entire lease period during which reduced parking applies. For example, if the number of employee parking spaces is reduced by 25 %, then the commercial tenant shall provide fully subsidized monthly transit passes to 25% of their employees for the entire period. iii) TDM Measures applicable to the residential component only. I) Transit Pass Subsidy for Rental Housing Units. Developer shall offer, in all lease or rental agreements with residential tenants in 27 the Rental Housing Units, each tenant the option to receive from Developer a 50% subsidy for purchase of a transit pass in consideration for such tenant relinquishing a parking space otherwise assigned and designated for his or her residential unit. Developer shall provide a 50% subsidized transit pass to a tenant for the same period of time that the tenant relinquishes its parking space in the Project. This requirement shall also apply to any residential Condominium Units that are leased to third parties by the Developer prior to initial date of sale except that in the case of tandem parking spaces, residents shall be required to relinquish both tandem spaces. 2) Transit Pass Subsidy for Residential Condominiums. Developer shall offer to all purchasers of residential Condominium Units a free transit pass (e.g. Metro EZ Pass, Big Blue Bus TAP Pass) for the first six months of their residency. 3) Transit Welcome Package for Residents. Developer shall provide all new residents of the residential component of the Project site with a Resident Transit Welcome Package (RTWP) on a per -unit basis. The RTWP at a minimum will include bus /rail transit route and bicycle facility information. 4) Workforce Housing Preference. In furtherance of the City's objective to improve the jobs/housing balance and to reduce total trip generation in the immediate area, the Developer shall implement a local preference marketing and housing sales program wherein preferential sales and /or leasing of residential units shall occur. Preference for available units shall be given first to employees within a reasonable walking distance (one -half mile) of the Project, second to first responders, such as firefighters, police officers, EMTs, nurses and other hospital workers, as well as teachers and other community serving employees, and third to employees that currently work within Santa Monica. A 5% discount off the market prices of the Condominium Units may be offered to the preference groups identified in this subsection, at the Developer's sole and absolute discretion. iv) Changes to TDM Plan, Any of the modifications to the TDM Plan proposed by Developer (or proposed by the Planning Director and agreed to by the Developer) to help the Project achieve the Peak Trip targets and AVR Goal shall be subject to the reasonable approval by the City's Planning Director as a Minor Modification. n) Transfer of Title to the City of the Residual Parcel. Upon issuance of a building permit for the Project, Developer hereby grants the City or its designee the exclusive option to take fee title to the Residual Parcel and shall convey to the City or its designee, for no additional consideration, fee title to the Residual Parcel in accordance with the requirements of this Section 2.6.2(n). i) Utility Connection Date. Prior to the issuance of a building permit for the Project, Developer shall, at its sole cost and expense, commence the following: (a) construction of any improvements and facilities required to cause , electric, water, gas and sewer utility connections for service of a trailer or mobilehome to 28 be stubbed to each of the 10 pads on the Residual Parcel, which utility connections shall be approved by the City's Division of Building and Safety as meeting all applicable code requirements; and (b) repair, reconstruct, alter or otherwise improve the retained mobilehome park on the Residual Parcel so that the retained park complies with all applicable life safety codes and regulations to the satisfaction of the City's Building Official. The utility connections and life safety improvements described above must be completed and approved by the City's Division of Building and Safety and the Building Official before the issuance of a certificate of occupancy for Building C. The date on which the utility connections are approved by the City's Division of Building and Safety and the Building Official has certified that the retained trailer park satisfies all applicable life safety codes and regulations shall be the "Utility Connection Date." ii) Park Transfer Date. Developer may, at its option and at any time, deliver written notice (the "Transfer Notice ") of Developer's intention to convey the Residual Parcel to the City or its designee. The Transfer Notice shall state the proposed date on which Developer intends to convey the Residual Parcel to the City or its designee (the "Park Transfer Date "); provided that the Park Transfer Date shall not be before the latest to occur of the following: (A) 180 days after the date of the Transfer Notice; (B) 15 full calendar months after the Effective Date of this Agreement; (C) 90 days after the Utility Connection Date; and (D) compliance with the condition of title required by Section 2.6.2(n)(ix) below. If the Park Transfer Date has not occurred within 20 years of the effective date of this Agreement due to Developer's inability to deliver clear title pursuant to Section 2.6.2(n)(ix) below, then after such date, the Developer shall convey the Residual Parcel to the City or its designee. iii) Designation of Entity to Obtain Fee Title. 60 days before the Park Transfer Date, the City shall deliver written notice to Developer of the entity (the "New Park Owner ") that will be the grantee under the grant deed for the Residual Parcel. iv) Affordable Housing Deed Restriction. Prior to the issuance of a certificate of occupancy for Building C, Developer shall execute and record against the Residual Parcel a deed restriction acceptable to the City restricting the use of the Residual Parcel to affordable housing effective only after the Residual Parcel ceases to be operated as a mobilehome park and is developed with a residential project. v) Grant Deed. Developer shall execute and deliver to the City for recording a grant deed for the Residual Parcel, with a grantee to be the New Park Owner. vi) FIRPTA. Developer shall deliver to the City a federal "FIRPTA" Affidavit executed by Developer and California's Real Estate Withholding Exemption Certificate Form 593 C. vii) Title. Developer shall deliver to the City a title commitment from a title company reasonably acceptable to the City, showing fee title in the Residual Parcel to be vested in the New Park Owner, in an amount to be determined O by the City, subject to no exceptions to title except for (a) all exceptions approved in writing by the City, (b) the title exceptions listed on Exhibit M, (c) tenancies for trailer pads on the Residual Parcel governed by the California Mobilehome Residency Law, and (d) any other exceptions to title that are created by Developer after the date of this Agreement, pursuant to and in accordance with the terms of this Agreement. The New Park Owner shall pay any title premium that may be required for the title policy. viii) No Representations. Developer shall make no representations or warranties regarding the Residual Parcel and the New Park Owner shall accept title to the Residual Parcel in its then "as -is, where -is" condition. ix) Condition of Title. Except for tenancies for trailer pads on the Residual Parcel governed by the California Mobilehome Residency Law and any contracts approved by the City in writing or constituting a permitted exception to title, before the Park Transfer Date may occur, there shall not exist any leases, contracts, judgments, court orders, or rights of occupancy or other agreements or contracts with respect to the Residual Parcel that would survive the transfer of title to the New Park Owner. 2.7 Parking. The number of parking spaces provided in the Project shall be 799, including up to forty percent (40 %) compact parking spaces. This Agreement and the Project Plans set forth the exclusive off - street parking requirements for the Project and supersede all other minimum space parking requirements under the Existing Regulations, including without limitation Part 9.04.10.08 of the Zoning Ordinance. 2.8 Design. a) Setbacks. Developer shall maintain the setbacks, if any, for the Project as set shown on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the setbacks established by this Agreement, then the setbacks required by this Agreement shall prevail. b) Building Height. The maximum height of the building shall be as set forth on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the building height allowed by this Agreement, then the building height allowed by this Agreement shall prevail. C) Stepbacks. Developer shall maintain the stepbacks, if any, for the Project as set forth on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the stepbacks required by this Agreement, then the stepbacks established by this Agreement shall prevail. d) Permitted Projections. Projections shall be permitted as reflected on the Project Plans. In the event that any inconsistencies exist between the Zoning Ordinance and the projections permitted by this Agreement, then the projections permitted by this Agreement shall prevail. IN C) Signagee. The location, size, materials, and color of any signage shall be reviewed by the ARB (or the Planning Commission on appeal) in accordance with the procedures set forth in Section 6.1 of this Agreement. All signs on the Project Property shall be subject to Chapter 9.52 of the SMMC (Santa Monica Sign Code) in effect as of the Effective Date, a copy of which is set forth in its entirety in Exhibit "I1 ". Directional signs for vehicles shall be located at approaches to driveways as required by the City's Strategic Transportation Planning Division. f) Balconies. Balconies shall be provided in accordance with the Project Plans. 2.9 Tract Map. The Tract Map will create the Project Property (Parcel 1) and the Residual Parcel (Parcel 2) as two land parcels and two airspace parcels; including one airspace parcel below grade of Parcel 1 for the subterranean parking garage and one airspace parcel above grade for Building C, that will allow for the future buildings and a common area lot which includes surface and subterranean parking, driveways and drive aisles, landscaping and hardscape and other common improvements as described in Recital F above. Ground Parcel 2 on the Tract Map will preserve ten (10) existing trailer park pads on the Residual Parcel. The land area of the Project Property shall be used to determine compliance with development standards, including, but not limited to Floor Area Ratio, setbacks, emergency access /egress and yards. The Tract Map will result in airspace subdivision with required parking, access, emergency egress and utilities to the proposed buildings and subterranean garage (airspace Lots 2 and 3) being provided within and across the land of Parcel 1. Consequently, Developer shall record or cause to be recorded a covenant and reciprocal easement agreement in the form approved by the City Attorney that will assure that sufficient parking, necessary access and utilities will at all times be provided for each building on the Property in accordance with this Development Agreement. Parcel 1, Parcel 2, and airspace Lots 2 and 3 will become separate legal parcels following recordation of the final Tract Map. 2.10 Parking Easement in Favor of the Residual Parcel. Concurrently with the recordation of the final Tract Map, Developer shall record a parking easement against so much of the Property as may be required to grant a perpetual parking easement for 40 parking spaces for the benefit of the Residual Parcel. Such parking easement shall be in a form determined by Developer and reasonably acceptable to the Director. Such easement shall provide that 10 parking spaces are required to be made available under the easement prior to the date the Residual Parcel is developed with a residential project that requires off -site parking spaces. 2.11 Contract With City. Developer hereby acknowledges that in issuing approving this Development Agreement for the Project, the City is waiving fees and taxes and modifying development standards otherwise applicable to the Project such as increasing unit density, reducing parking standards, and other property development standards. In exchange for such forms of assistance from the City, which are of financial benefit to the Developer, Developer has entered into this contract with the City and agreed to the other conditions of the Development Agreement, including the requirement included in this Agreement to provide and maintain 16 Affordable Units on the Project 31 Property for occupancy by income qualified households. The parties agree and acknowledge that this is a contract, providing forms of assistance to the Developer within the meaning of Civil Code Section 1954.52 (b) and Government Code Section 65915 et seq. ARTICLE 3 CONSTRUCTION 3.1 Construction Mitigation Plan. During the construction phase of the Project, Developer shall comply with the Construction Mitigation Plan attached as Exhibit "I" hereto. 3.2 Construction Hours. Developer shall be permitted to perform construction between the hours of 8:00 a.m. to 6:00 p.m. Monday through Friday, and 9:00 a.m. to 5:00 p.m. Saturday; provided that interior construction work which does not generate noise of more than thirty (30) decibels beyond the Property line may also be performed between the hours of 7:00 a.m. to 8:00 a.m. and 6:00 p.m. to 7:00 p.m. Monday through Friday, and 8:00 a.m. to 9:00 a.m. and 5:00 p.m. to 6:00 p.m. Saturday. Notwithstanding the foregoing, pursuant to SMMC Section 4.12.110(e), Developer has the right to seek a permit from the City authorizing construction activity during the times otherwise prohibited by this Section. The Parties acknowledge and agree that, among other things, afterhours construction permits can be granted for concrete pours. 3.3 Outside Building Permit Issuance Date. If Developer has not been issued a building permit for the Project by the "Outside Building Permit Issuance Date" (defined below), then on the day after the Outside Building Permit Issuance Date, without any further action by either Party, this Agreement shall automatically terminate and be of no further force or effect. For purposes of clarity, if Developer has not been issued a building permit for the Project by the Outside Building Permit Issuance Date, the City shall not be required to pursue its remedies under Section 11.4 of this Agreement, and this Agreement shall, instead, automatically terminate. "Outside Building Permit Issuance Date" means the date that is the last day of the forty eighth (481h) full calendar month after the Effective Date; provided that the Outside Building Permit Issuance Date may be extended by applicable Excusable Delays and otherwise in accordance with the remainder of this paragraph. If the approval by the ARB of the Project design does not occur within four (4) months of the submittal by Developer to the ARB of the Project design, then the Outside Building Permit Issuance Date shall be extended one month for each additional month greater than four that the final ARB approval is delayed. At any time after the last day of the forty second (42nd) full calendar month after the Effective Date (the "Extension Notice Date "), Developer may deliver written notice to the Planning Director, requesting an extension of the Outside Building Permit Issuance Date for an additional twelve (12) months. The Outside Building Permit Issuance Date may be administratively extended not more than one time. The Planning Director may grant such extension if Developer can demonstrate substantial progress has been made towards 32 obtaining a building permit and show reasonable cause why Developer will not be able to obtain the building permit for the Project by the initial Outside Building Permit Issuance Date and can demonstrate that: (a) the condition of the Property will not adversely affect public health or safety and (b) the continued delay will not create any unreasonable visual or physical detriment to the neighborhood. 3.4 Construction Period. Construction of the Project shall be subject to the provisions of SMMC Section 8.08.070. 3.5 Damage or Destruction. If the Project, or any part thereof, is damaged or destroyed during the term of this Agreement, Developer shall be entitled to reconstruct the Project in accordance with this Agreement if: (a) Developer obtains a building permit for this reconstruction prior to the expiration of this Agreement and (b) the Project is found to be consistent with the City's General Plan in effect at the time of obtaining the building permit. ARTICLE 4 PROJECT FEES, EXACTIONS, MITIGATION MEASURES AND CONDITIONS 4.1 Fees, Exactions, Mitigation Measures and Conditions. Except as expressly set forth in Section 2.6.2 (relating to Community Benefits) above, and in Section 4.2 (relating to modifications), and Section 5.2 (relating to Subsequent Code Changes) below, the City shall charge and impose only those fees, exactions, mitigation measures, conditions, and standards of construction set forth in this Agreement, including Exhibits "C ", "D" and "I" attached hereto, and no others. If any of the mitigation measures or conditions set forth on Exhibit "D" is satisfied by others, Developer shall be deemed to have satisfied such measures or conditions. The City waives any right it may have to collect any fees or charges pursuant to Government Code Sections 65863.7 subdivision (g). 4.2 Conditions on Modifications. The City may impose fees, exactions, mitigation measures and conditions in connection with its approval of Minor or Major Modifications, provided that all fees, exactions, mitigation measures and conditions shall be in accordance with any applicable law. 4.3 Implementation of Mitigation Measures and Conditions of Approval. 4.3.1 Compliance with Mitigation Measures and Conditions of Approval. Developer shall be responsible for implementing the mitigation measures set forth in Section A of Exhibit "D" attached hereto, and Developer shall be responsible to adhere to the conditions of approval set forth in Section B of Exhibit "D" in accordance with the timelines established in Exhibit "D ". 33 4.3.2 Survival of Mitigation Measures and Conditions of Approval. If Developer proceeds with the construction of the Project, except as otherwise expressly limited in this Agreement, the obligations and requirements imposed by the mitigation measures and conditions of approval set forth in the attached Exhibit "D" and the tenant relocation plan set forth in the attached Exhibit "K" shall survive the expiration of the Term of this Agreement and shall remain binding on Developer, its successors and assigns, and shall continue in effect for the life of the Project. Notwithstanding the above, the obligations set forth in Exhibit "K" shall survive the expiration or termination of this Agreement, even if the Developer does not proceed with construction of the Project, and shall remain binding on Developer, its successors and assigns. ARTICLE 5 EFFECT OF AGREEMENT ON CITY LAWS AND REGULATIONS 5.1 Development Standards for the Property; Existing Regulations. The following development standards and restrictions set forth in this Section 5.1 govern the use and development of the Project and shall constitute the Existing Regulations, except as otherwise expressly required by this Agreement. 5.1.1 Defined Terms. The following terms shall have the meanings set forth below: a) "Existing Regulations" collectively means all of the following which are in force and effect as of the Effective Date: (i) the General Plan (including, without limitation, the LUCE); (ii) the Zoning Ordinance except as modified herein; (iii) the IZO; (iv) any and all ordinances, rules, regulations, standards, specifications and official policies of the City governing, regulating or affecting the demolition, grading, design, development, building, construction, occupancy or use of buildings and improvements or any exactions therefore, except as amended by this Agreement; and (v) the development standards and procedures in ARTICLE 2 of this Agreement. b) "Subsequent Code Changes" collectively means all of the following which are adopted or approved subsequent to the Effective Date, whether such adoption or approval is by the City Council, any department, division, office, board, commission or other agency of the City, by the people of the City through charter amendment, referendum, initiative or other ballot measure, or by any other method or procedure: (i) any amendments, revisions, additions or deletions to the Existing Regulations; or (ii) new codes, ordinances, rules, regulations, standards, specifications and official policies of the City governing or affecting the grading, design, development, construction, occupancy or use of buildings or improvements or any exactions therefor. "Subsequent Code Changes" includes, without limitation, any amendments, revisions or additions to the Existing Regulations imposing or requiring the payment of any fee, special assessment or tax. 34 5.1.2 Existing Regulations Govern the Project. Except as provided in Section 5.2, development of the Buildings and improvements that will comprise the Project, including without limitation, the development standards for the demolition, grading, design, development, construction, occupancy or use of such Buildings and improvements, and any exactions therefor, shall be governed by the Existing Regulations. The City agrees that this Agreement is consistent with the General Plan, including the LUCE, as more fully described in the Recitals. Any provisions of the Existing Regulations inconsistent with the provisions of this Agreement, to the extent of such inconsistencies and not further are hereby deemed modified to that extent necessary to effectuate the provisions of this Agreement. The Project shall be exempt from: (a) all Discretionary Approvals or review by the City or any agency or body thereof, other than the matters of architectural review by the ARB as specified in Section 6.1 and review of modifications to the Project as expressly set forth in Section 2.4.2 and Section 2.4.3 above; (b) the application of any subsequent local development or building moratoria, development or building rationing systems or other restrictions on development which would adversely affect the rate, timing, or phasing of construction of the Project, and (c) Subsequent Code Changes which are inconsistent with this Agreement. 5.2 Permitted Subsequent Code Changes. 5.2.1 Applicable Subsequent Code Changes. Notwithstanding the terms of Section 5. 1, this Agreement shall not prevent the City from applying to the Project the following Subsequent Code Changes set forth below in this Section 5.2.1. a) Processing fees and charges imposed by the City to cover the estimated actual costs to City of processing applications for development approvals including: (i) all application, permit, and processing fees incurred for the processing of this Agreement, any administrative approval of a Minor Modification, or any amendment of this Agreement in connection with a Major Modification; (ii) all building plan check and building inspection fees for work on the Property in effect at the time an application for a grading permit or building permit is applied for; and (iii) the public works plan check fee and public works inspection fee for public improvements constructed and installed by Developer and (iv) fees for monitoring compliance with any development approvals, or any environmental impact mitigation measures; provided that such fees and charges are uniformly imposed by the City at similar stages of project development on all similar applications and for all similar monitoring. b) General or special taxes, including, but not limited to, property taxes, sales taxes, parcel taxes, transient occupancy taxes, business taxes, which may be applied to the Property or to businesses occupying the Property; provided that (i) the tax is of general applicability City -wide and does not burden the Property disproportionately to other similar developments within the City; and (ii) the tax is not a levy, assessment, fee or tax imposed for the purpose of funding public or private improvements on other property located within the Mixed -Use Creative District (as defined in the City's General Plan as of the Effective Date). 35 c) Procedural regulations relating to hearing bodies, petitions, applications, notices, documentation of findings, records, manner in which hearings are conducted, reports, recommendations, initiation of appeals, and any other matters of procedure; provided such regulations are uniformly imposed by the City on all matters, do not result in any unreasonable decision - making delays and do not affect the substantive findings by the City in approving this Agreement or as otherwise established in this Agreement. d) Regulations governing construction standards and specifications which are of general application that establish standards for the construction and installation of structures and associated improvements, including, without limitation, the City's Building Code, Plumbing Code, Mechanical Code, Electrical Code and Fire Code; provided that such construction standards and specifications are applied on a City -wide basis and do not otherwise limit or impair the Project approvals granted in this Agreement unless adopted to meet health and safety concerns. e) Any City regulations to which Developer has consented in writing. I) Collection of such fees or exactions as are imposed and set by governmental entities not controlled by City but which are required to be collected by City. g) Regulations which do not impair the rights and approvals granted to Developer under this Agreement. For the purposes of this Section 5.2.1(g), regulations which impair Developer's rights or approvals include, but are not limited to, regulations which (i) materially increase the cost of the Project (except as provided in Section 5.2.1(a), (b), and (d) above), or (ii) which would materially delay development of the Project or that would cause a material change in the uses of the Project as provided in this Agreement. 5.2.2 New Rules and Regulations. This Agreement shall not be construed to prevent the City from applying new rules, regulations and policies in those circumstances specified in Government Code Section 65866. 5.2.3 State or Federal Laws. In the event that state or federal laws or regulations; enacted after the Effective Date, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such state or federal laws or regulations; provided that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. 5.3 Common Set of Existing Regulations. Prior to the Effective Date, the City and Developer shall use reasonable efforts to identify, assemble and copy three identical sets of the Existing Regulations, to be retained by the City and Developer, so that if it 36 becomes necessary in the future to refer to any of the Existing Regulations, there will be a common set of the Existing Regulations available to all Parties. 5.4 Conflicting Enactments. Except as provided in Section 5.2 above, any Subsequent Code Change which would conflict in any way with or be more restrictive than the Existing Regulations shall not be applied by the City to any part of the Property. Developer may, in its sole discretion, give the City written notice of its election to have any Subsequent Code Change applied to such portion of the Property as it may have an interest in, in which case such Subsequent Code Cbange shall be deemed to be an Existing Regulation insofar as that portion of the Property is concerned. If there is any conflict or inconsistency between the terms and conditions of this Agreement and the Existing Regulations, the terms and conditions of this Agreement shall control. 5.5 Timing of Development. The California Supreme Court held in Pardee Construction Co. v. City of Camarillo (1984) 37 Cal.3d 465, that failure of the parties in that case to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over the parties' agreement. It is the intent of Developer and the City to cure that deficiency by expressly acknowledging and providing that any Subsequent Code Change that purports to limit over time the rate or timing of development or to alter the sequencing of development phases (whether adopted or imposed by the City Council or through the initiative or referendum process) shall not apply to the Property or the Project and shall not prevail over this Agreement. In particular, but without limiting any of the foregoing, no numerical restriction shall be placed by the City on the amount of total square feet or the number of buildings, structures, residential units that can be built each year on the Property except as expressly provided in this Agreement. 5.6 Process for Closure of Village Trailer Park. Developer shall complete all of the steps set forth below in this Section 5.6 prior to closing the mobilehome park now located at the Project Property. Developer shall comply with the Tenant Relocation Plan set forth on Exhibit 'W'. Notwithstanding anything in this Section 5.6 to the contrary, in the event this Development Agreement is rendered ineffective or invalidated by court order as a result of a legal challenge or for other valid reason, Developer does not waive or relinquish any rights it may have under the Closure Notice that Developer delivered prior to the execution of the MOU. 5.6.1 Developer may not give the six months' written notice of termination of tenancy required by Civil Code Section 798.56(g)(2) and Section 5.6.2 below until the effective date of the Removal Permit issued by the Santa Monica Rent Control Board for the Project Property. 5.6.2 After the effective date of the Removal Permit issued by the Santa Monica Rent Control Board for the Project Property, any steps taken by Developer to terminate the tenancy of occupants of the Property shall comply with the applicable sections of the Mobilehome Residency Law, including the six months' written notice requirement of Civil Code Section 798.56(g)(2), which permits a change of use in connection with applicable local government permits. 37 5.6.3 Developer may not close portions of the mobilehome park now located at the Project Property earlier than six (6) months after the date of the notice issued under Section 5.6.2 above. 5.6.4 Developer shall implement the Tenant Relocation Plan set forth on Exhibit "K" for all VTP residents of the portions of the mobilehome park now located on the Project Property. 5.7 Operation of the Existing Mobilehome Park Prior to Closure. Developer acknowledges and agrees that, until the date that Developer has closed that portion of the mobilehome park now located on the Project Property, Developer is required to continue to operate the existing mobilehome park in compliance with all applicable laws, codes, ordinances, and regulations. ARTICLE 6 ARCHITECTURAL REVIEW BOARD 6.1 Architectural Review Board Approval. The Project shall be subject to review and approval or conditional approval by the ARB in accordance with design review procedures in effect under the Existing Regulations. Consistent with Existing Regulations, the ARB cannot require modifications to the building design which negates the fundamental development standards established by this Agreement. For example, the ARB cannot require reduction in the overall height of the buildings, reduction in the number of stories in the buildings, reduction in density, or reduction in floor area greater than two percent (2.0 %) from each building. Decisions of the ARB are appealable to the Planning Commission in accordance with the Existing Regulations. ARTICLE 7 CITY TECHNICAL PERMITS 7.1 Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below: 7.1.1 "Technical City Permits" means any Ministerial Approvals, consents or permits from the City or any office, board, commission, department, division or agency of the City, which are necessary for the actual construction of the Project or any portion thereof in accordance with the Project Site Plan and this Agreement. Technical City Permits include, without limitation (a) building permits, (b) related mechanical, electrical, plumbing and other technical permits, (c) demolition, excavation and grading permits, (d) encroachment permits, and (e) temporary and final certificates of occupancy. 38 7.1.2 "Technical Permit Applications" means any applications required to be filed by Developer for any Technical City Permits. 7.2 Diligent Action by City. 7.2.1 Upon satisfaction of the conditions set forth in Section 7.3, the City shall accept the Technical Permit Applications filed by Developer with the City and shall diligently proceed to process such Technical Permit Applications to completion. 7.2.2 Upon satisfaction of the conditions set forth in Section 7.3, the City shall diligently issue the Technical City Permits which are the subject of the Technical Permit Applications. 7.3 Conditions for Diligent Action by the City. 7.3.1 Acceptance and Processing of Technical Permit Applications. The obligation of the City to accept and diligently process the Technical Permit Applications which are filed by Developer, and then issue the Technical City Permits, is subject to the satisfaction of the following conditions: a) Developer shall have completed and filed all Technical Permit Applications which are required under the administrative procedures and policies of the City which are in effect on the date when the Technical Permit Application is filed; provided that such procedures and policies are uniformly in force and effect throughout the City; b) Developer shall have paid all processing and permit fees established by the City in connection with the filing and processing of any Technical Permit Application which are in effect on the date when the Technical Permit Application is filed; provided that such fees are uniformly in force and effect throughout the City; and C) If required for the particular Technical Permit Application, Developer shall have obtained the approval of the ARB referred to in Section 6.1 above. 7.3.2 Issuance of a Technical City Permit. The obligation of the City to issue a Technical City Permit which is the subject of a Technical Permit Application filed by Developer is subject to the satisfaction of the following conditions (and only such conditions and no others): a) Developer shall have complied with all of its obligations under this Agreement which are required to be performed prior to or concurrent with the issuance of the Technical City Permits for the proposed Buildings; b) Developer shall have received any permits or approvals from other governmental agencies which are required by law to be issued prior to or concurrent with the issuance of the Technical City Permits for the proposed Buildings; IN C) The proposed Buildings conform to the development standards for such Buildings established in this Agreement. In the event that a proposed Building is not in conformance with the development standards, Developer shall have the right to seek any relief from such standards under the procedures then available in the City; and d) The proposed Buildings conform to the Administrative and Technical Construction Codes of the City (Article VIII, Chapter 1 of the Santa Monica Municipal Code) (the "Technical Codes ") in effect on the date that the Technical Permit Application is filed. 7.3.3 New Technical Requirements. From time to time, the City's Technical Codes are amended to meet new technical requirements related to techniques of building and construction. If the sole means of achieving compliance for the Project with such revisions to the Technical Codes made after the Effective Date ( "New Technical Requirements ") would require an increase from the allowable Building Height established in this Agreement for the Project, then the Planning Director is hereby authorized to grant Developer limited relief from the allowable Building Height without amending this Agreement if the requested relief is in compliance with the City's General Plan. Any such approval shall be granted only after the Planning Director's receipt of a written request for such relief from Developer. Developer is required to supply the Planning Director with written documentation of the fact that compliance with the New Technical Requirements cannot be achieved by some other method. Any such relief shall only be granted to the extent necessary in the Planning Director's determination for Developer to comply with the New Technical Requirements. 7.4 Duration of Technical City Permits. The duration of Technical City Permits issued by the City, and any extensions of the time period during which such Technical City Permits remain valid, shall be established in accordance with the Technical Codes in effect at the time that the Technical City Permits are issued. Subject to the terms of the next sentence, the lapse or expiration of a Technical City Permit shall not preclude or impair Developer from subsequently filing another Technical Permit Application for the same matter during the Term of this Agreement, which shall be processed by the City in accordance with the provisions of this ARTICLE 7. Notwithstanding anything to the contrary in this Agreement, if Developer obtains building permits for the Project and, at any time after the Outside Construction Start Date, such building permits expire or are revoked pursuant to the applicable terms of the SMMC (as the same may be amended from time to time), then Developer may not subsequently apply for new building permits for the Project without first obtaining the prior written consent of the Planning Director, which may be granted or withheld in the Planning Director's sole discretion. 40 ARTICLE 8 AMENDMENT AND MODIFICATION 8.1 Amendment and Modification of Development Agreement. Subject to the notice and hearing requirements of the applicable Development Agreement Statutes, this Agreement may be modified or amended from time to time only with the written consent of Developer and the City or their successors and assigns in accordance with the provisions of the SMMC and Section 65868 of the California Government Code. ARTICLE 9 TERM 9.1 Effective Date. This Agreement shall be dated, and the obligations of the Parties hereunder shall be effective as of the date upon which the ordinance approving this Agreement becomes effective (the "Effective Date "). The Parties shall execute this Agreement within ten (10) working days of the Effective Date. 9.2 Term. 9.2.1 Term of Agreement. The term of this Agreement shall commence on the Effective Date and shall continue for ten (10) years thereafter (the "Term "), unless the Term is otherwise terminated pursuant to Section 11.4, after the satisfaction of all applicable public hearing and related procedural requirements or pursuant to Section 3.3. 9.2.2 Termination Certificate. Upon termination of this Agreement, the Parties hereto shall execute an appropriate certificate of termination in recordable form (a "Termination Certificate "), which shall be recorded in the official records of Los Angeles County. 9.2.3 Effect of Termination. Except as expressly provided herein (e.g., Section 4.3.2), none of the parties' respective rights and obligations under this Agreement shall survive the Term. ARTICLE 10 PERIODIC REVIEW OF COMPLIANCE 10.1 City Review. The City shall review compliance with this Development Agreement once each year, on or before each anniversary of the Effective Date (each, a "Periodic Review "), in accordance with this ARTICLE 10 in order to determine whether or not Developer is out -of- compliance with any specific term or provision of this Agreement. . 41 10.2 Evidence of Good Faith Compliance. At least sixty (60) days prior to the applicable anniversary date, Developer shall deliver to the City a written report demonstrating that Developer has been in good faith compliance with this Agreement during the twelve (12) month period prior to the anniversary of the Effective Date. The written report shall be provided in the form established by the City. For purposes of this Agreement, the phrase "good faith compliance" shall mean the following: (a) compliance by Developer with the requirements of the Existing Regulations, except as otherwise modified by this Agreement; and (b) compliance by Developer with the terms and conditions of this Agreement, subject to the existence of any specified Excusable Delays (as defined in Section 15.8 below) which prevented or delayed the timely performance by Developer of any of its obligations under this Agreement. 10.3 Information to be Provided to Developer. Prior to any public hearing concerning the Periodic Review of this Agreement, the City shall deliver to Developer a copy of all staff reports prepared in connection with a Periodic Review, written comments from the public and, to the extent practical, all related exhibits concerning such Periodic Review. If the City delivers to Developer a Notice of Breach pursuant to Section 11.1 below, the City shall concurrently deliver to Developer a copy of all staff reports prepared in connection with such Notice of Breach, all written comments from the public and all related exhibits concerning such Notice of Breach. 10.4 Notice of Breach; Cure Rights. If during any Periodic Review, the City reasonably concludes on the basis of substantial evidence that Developer has not demonstrated that it is in good faith compliance with this Agreement, then the City may issue and deliver to Developer a written Notice of Breach pursuant to Section 11.1 below, and Developer shall have the opportunity to cure the default identified in the Notice of Breach during the cure periods and in the manner provided by Section 11.2 and Section 11.3, as applicable. 10.5 Failure of Periodic Review. The City's failure to review at least annually compliance by Developer with the terms and conditions of this Agreement shall not constitute or be asserted by any Party as a breach by any other Party of this Agreement. 10.6 Termination of Development Agreement. If Developer fails to timely cure any item(s) of non - compliance set forth in a Notice of Default, then the City shall have the right but not the obligation to initiate proceedings for the purpose of terminating this Agreement pursuant to Section 11.4 below. 10.7 City Cost Recovery. Following completion of each Periodic Review, Developer shall reimburse the City for its actual and reasonable costs incurred in connection with such review. 42 ARTICLE l l DEFAULT 11.1 Notice and Cure. 11.1.1 Breach. If either Party fails to substantially to perform any term, covenant or condition of this Agreement which is required on its part to be performed (a `Breach "), the non - defaulting Party shall have those rights and remedies provided in this Agreement; provided that such non- defaulting Party has first sent a written notice of Breach (a "Notice of Breach "), in the manner required by Section 15.1, specifying the precise nature of the alleged Breach (including references to pertinent Sections of this Agreement and the Existing Regulations or Subsequent Code Changes alleged to have been breached), and the manner in which the alleged Breach may satisfactorily be cured. If the City alleges a Breach by Developer, the City shall also deliver a copy of the Notice of Breach to any Secured Lender of Developer which has delivered a Request for Notice to the City in accordance with ARTICLE 12. 11.1.2 Monetary Breach. In the case of a monetary Breach by Developer, Developer shall promptly commence to cure the identified Breach and shall complete the cure of such Breach within thirty (30) business days after receipt by Developer of the Notice of Breach; provided that if such monetary Breach is the result of an Excusable Delay or the cure of the same is delayed as a result of an Excusable Delay, Developer shall deliver to the City reasonable evidence of the Excusable Delay. 11.1.3 Non - Monetary Breach. In the case of a non - monetary Breach by either Party, the alleged defaulting Party shall promptly commence to cure the identified Breach and shall diligently prosecute such cure to completion; provided that the defaulting Party shall complete such cure within thirty (30) days after receipt of the Notice of Breach or provide evidence of Excusable Delay that prevents or delays the completion of such cure. The thirty (30) day cure period for a non - monetary Breach shall be extended as is reasonably necessary to remedy such Breach; provided that the alleged defaulting Party commences such cure promptly after receiving the Notice of Breach and continuously and diligently pursues such remedy at all times until such Breach is cured. 11. 1.4 Excusable Delay. Notwithstanding anything to the contrary contained in this Agreement, the City's exercise of any of its rights or remedies under this Article 1 I shall be subject to the provisions regarding Excusable Delay in Section 15.8 below. 11.2 Remedies for Monetary Default. If there is a Breach by Developer in the performance of any of its monetary obligations under this Agreement which remains uncured (a) thirty (30) business days after receipt by Developer of a Notice of Breach from the City and (b) after expiration of Secured Lender's Cure Period under Section 12.1 (if a Secured Lender of Developer has delivered a Request for Notice to the City in accordance with Section 12. 1), then an "Event of Monetary Default" shall have occurred by Developer and the City shall have available any right or remedy provided in 43 this Agreement, at law or in equity. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy. 11.3 Remedies for Non - Monetary Default. 11.3.1 Remedies of Parties. If any Party receives a Notice of Breach from the other Party regarding a non - monetary Breach, and the non- monetary Breach remains uncured: (a) after expiration of all applicable notice and cure periods, and (b) in the case of a Breach by Developer, after the expiration of Secured Lender's Cure Period under Section 12.1 (if a Secured Lender of Developer has delivered a Request for Notice to the City in accordance with Section 12. 1), then an "Event of Non - Monetary Default" shall have occurred and the non - defaulting Party shall have available any right or remedy provided in this Agreement, or provided at law or in equity except as prohibited by this Agreement. All of said remedies shall be cumulative and not exclusive of one another, and the exercise of any one or more of said remedies shall not constitute a waiver or election in respect to any other available remedy. 11.3.2 Specific Performance. The City and Developer acknowledge that monetary damages and remedies at law generally are inadequate and that specific performance is an appropriate remedy for the enforcement of this Agreement. Therefore, unless otherwise expressly provided herein, the remedy of specific performance shall be available to the non - defaulting party if the other Party causes an Event of Non - Monetary Default to occur. 11.3.3 Writ of Mandate. The City and Developer hereby stipulate that Developer shall be entitled to obtain relief in the form of a writ of mandate in accordance with Code of Civil Procedure Section 1085 or Section 1094.5, as appropriate, to remedy any Event of Non - Monetary Default by the City of its obligations and duties under this Agreement. Nothing in this Section 11.3.3, however, is intended to alter the evidentiary standard or the standard of review applicable to any action of, or approval by, the City pursuant to this Agreement or with respect to the Project. 11.3.4 No Damages Relief Against City. It is acknowledged by Developer that the City would not have entered into this Agreement if the City were to be liable in damages under or with respect to this Agreement or the application thereof. Consequently, and except for the payment of attorneys' fees and court costs, the City shall not be liable in damages to Developer and Developer covenants on behalf of itself and its successors in interest not to sue for or claim any damages: a) for any default under this Agreement; b) for the regulatory taking, impairment or restriction of any right or interest conveyed or provided hereunder or pursuant hereto; or C) arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement. 44 The City and Developer agree that the provisions of this Section 11.3.4 do not apply for damages which: (a) do not arise under this Agreement; (b) are not with respect to any right or interest conveyed or provided under this Agreement or pursuant to this Agreement; or (c) do not arise out of or which are not connected to any dispute, controversy, or issue regarding the application, interpretation, or effect of the provisions of this Agreement or the application of any City rules, regulations, or official policies. 11.3.5 Enforcement by the City. The City, at its discretion, shall be entitled to apply the remedies set forth in Chapters 1.09 and 1.10 of the SMMC as the same may be amended from time to time and shall follow the notice procedures of Chapter 1.09 and 1.10 respectively in lieu of Section 11.1 of this Agreement if these remedies are applied. 11.3.6 No Damages Against Developer. It is acknowledged by the City that Developer would not have entered into this Agreement if Developer were to be liable in damages in connection with any non- monetary default hereunder. Consequently, and except for the payment of attorneys' fees and court costs, Developer shall not be liable in damages to the City for any nonmonetary default and the City covenants on behalf of itself not to sue for or claim any damages: (a) for any non- monetary default hereunder or; (b) arising out of or connected with any dispute, controversy or issue regarding; (c) the application or interpretation or effect of the provisions of this Agreement. The City and Developer agree that the provisions of this Section 11.3.6 do not apply for damages which: (a) are for a monetary default; or (b) do not arise out of or which are not connected with any dispute, controversy or issue regarding the application, interpretation, or effect of the provisions of this Agreement to or the application of, any City rules, regulations, or official policies. 11.3.7 No Other Limitations. Except as expressly set forth in this Section 11.3, the provisions of this Section 11.3 shall not otherwise limit any other rights, remedies, or causes of action that either the City or Developer may have at law or equity after the occurrence of any Event of Non - Monetary Default. 45 l l .4 Modification or Termination of Agreement by City. 11.4.1 Default by Developer. If Developer causes either an Event of Monetary Default or an Event of Non - Monetary Default, then the City may commence proceedings to modify or terminate this Agreement pursuant to this Section 11.4. 11.4.2 Procedure for Modification or Termination. The procedures for modification or termination of this Agreement by the City for the grounds set forth in Section 11.4.1 are as follows: a) The City shall provide a written notice to Developer (and to any Secured Lender of Developer which has delivered a Request for Notice to the City in accordance of Section 12.1) of its intention to modify or terminate this Agreement unless Developer (or the Secured Lender) cures or corrects the acts or omissions that constitute the basis of such determinations by the City (a "Hearing Notice "). The Hearing Notice shall be delivered by the City to Developer in accordance with Section 15.1 and shall contain the time and place of a public hearing to be held by the City Council on the determination of the City to proceed with modification or termination of this Agreement. The public hearing shall not be held earlier than: (i) thirty -one (3 1) days after delivery of the Hearing Notice to Developer or (ii) if a Secured Lender has delivered a Request for Notice in accordance with Section 12. 1, the day following the expiration of the "Secured Lender Cure Period" (as defined in Section 12.1). b) If, following the conclusion of the public hearing, the City Council: (i) determines that an Event of Non - Monetary Default has occurred or the Developer has not been in good faith compliance with this Agreement pursuant to Section 10. 1, as applicable and (ii) further determines that Developer (or the Secured Lender, if applicable) has not cured (within the applicable cure periods) the acts or omissions that constitute the basis of the determination under clause (i) above or if those acts or omissions could not be reasonably remedied prior to the public hearing that Developer (or the Secured Lender) has not in good faith commenced to cure or correct such acts or omissions prior to the public hearing or is not diligently and continuously proceeding therewith to completion, then upon making such conclusions, the City Council may modify or terminate this Agreement. The City cannot unilaterally modify the provisions of this Agreement pursuant to this Section 11.4. Any such modification requires the written consent of Developer. If the City Council does not terminate this Agreement, but proposes a modification to this Agreement as a result of the public hearing and Developer does not (within five (5) days of receipt) execute and deliver to the City the form of modification of this Agreement submitted to Developer by the City, then the City Council may elect to terminate this Agreement at any time after the sixth day after Developer's receipt of such proposed modification. ., 11.5 Cessation of Rights and Obligations. If this Agreement is terminated by the City pursuant to and in accordance with Section 11.4, the rights, duties and obligations of the Parties under this Agreement shall cease as of the date of such termination, except only for those rights and obligations that expressly survive the termination of this Agreement. In such event, any and all benefits, including money received by the City prior to the date of termination, shall be retained by the City. 11.6 Completion of Improvements. Notwithstanding the provisions of Sections 11.2, 11.3, 11.4, and 11.5, if prior to termination of this Agreement, Developer has performed substantial work and incurred substantial liabilities in good faith reliance upon a building permit issued by the City, then Developer shall have acquired a vested right to complete construction of the Buildings in accordance with the terms of the building permit and occupy or use each such Building upon completion for the uses permitted for that Building as provided in this Agreement. Any Building completed or occupied pursuant to this Section 11.6 shall be considered legal non - conforming subject to all City ordinances standards and policies as they then exist governing legal non- conforming buildings and uses unless the Building otherwise complies with the property development standards for the district in which it is located and the use is otherwise permitted or conditionally permitted in the district. ARTICLE 12 MORTGAGEES 12.1 Encumbrances on the Property. This Agreement shall not prevent or limit Developer (in its sole discretion), from encumbering the Property (in any manner) or any portion thereof or any improvement thereon by any mortgage, deed of trust, assignment of rents or other security device securing financing with respect to the Property (a "Mortgage "). Each mortgagee of a mortgage or a beneficiary of a deed of trust (each, a "Secured Lender ") on the Property shall be entitled to the rights and privileges set forth in this ARTICLE 12. Any Secured Lender may require from the City certain interpretations of this Agreement. The City shall from time to time, upon request made by Developer, meet with Developer and representatives of each of its Secured Lenders to negotiate in good faith any Secured Lender's request for interpretation of any part of this Agreement. The City will not unreasonably withhold, condition or delay, the delivery to a Secured Lender of the City's written response to any such requested interpretation. 12. 1.1 Mortgage Not Rendered Invalid. Except as provided in Section 12.1.2, neither entering into this Agreement nor a Breach of this Agreement, nor any Event of Monetary Default nor any Event of Non - Monetary Default shall defeat, render invalid, diminish, or impair the lien of any Mortgage made in good faith and for value. 12.1.2 Priority of Agreement; This Agreement shall be superior and senior to the lien of any Mortgage. Any acquisition or acceptance of title or any right or 47 interest in or with respect to the Property or any portion thereof by a Secured Lender or its successor in interest (whether pursuant to foreclosure, trustee's sale, deed in lieu of foreclosure, lease termination or otherwise) shall be subject to all of the terms and conditions of this Agreement. 12.1.3 Right of Secured Lender to Cure Default. a) A Secured Lender may give notice to the City, specifying the name and address of such Secured Lender and attaching thereto a true and complete copy of the Mortgage held by such Secured Lender, specifying the portion of the Property that is encumbered by the Secured Lender's lien (a "Request for Notice "). If the Request for Notice has been given, at the same time the City sends to Developer any Notice of Breach or Hearing Notice under this Agreement, then if such Notice of Breach or Hearing Notice affects the portion of the Property encumbered by the Secured Lender's lien, the City shall send to such Secured Lender a copy of each such Notice of Breach and each such Hearing Notice from the City to Developer. The copy of the Notice of Breach or the Hearing Notice sent to the Secured Lender pursuant to this Section 12.1.3(a) shall be addressed to such Secured Lender at its address last furnished to the City. The period within which a Secured Lender may cure a particular Event of Monetary Default or Event of Non - Monetary Default shall not commence until the City has sent to the Secured Lender such copy of the applicable Notice of Breach or Hearing Notice. b) After a Secured Lender has received a copy of such Notice of Default or Hearing Not such Secured Lender shall thereafter have a period of time (in addition to any notice and /or cure period afforded to Developer under this Agreement) equal to: (a) ten (10) business days in the case of any Event of Monetary Default and (b) thirty (30) days in the case of any Event of Non-Monetary Default, during which period the Secured Lender may provide a remedy or cure of the applicable Event of Monetary Default or may provide a remedy or cure of the applicable Event of Non - Monetary Default; provided that if the cure of the Event of Non - Monetary Default cannot reasonably be completed within thirty days, Secured Lender may, within such 30 -day period, commence to cure the same and thereafter diligently prosecute such cure to completion (a "Secured Lender's Cure Period "). If Developer has caused an Event of Monetary Default or an Event of Non - Monetary Default, then each Secured Lender shall have the right to remedy such Event of Monetary Default or an Event of Non - Monetary Default, as applicable, or to cause the same to be remedied prior to the conclusion of the Secured Lender's Cure Period and otherwise as herein provided. The City shall accept performance by any Secured Lender of any covenant, condition, or agreement on Developer's part to be performed hereunder with the same force and effect as though performed by Developer. C) The period of time given to the Secured Lender to cure any Event of Monetary Default or an Event of Non - Monetary Default by Developer which reasonably requires that said Secured Lender be in possession of the Property to do so, shall be deemed extended to include the period of time reasonably required by said Secured Lender to obtain such possession (by foreclosure, the appointment of a receiver W. or otherwise) promptly and with due diligence; provided that during such period all other obligations of Developer under this Agreement, including, without limitation, payment of all amounts due, are being duly and promptly performed. 12.1.4 Secured Lender Not Obligated Under this Agreement. a) No Secured Lender shall have any obligation or duty under this Agreement to perform the obligations of Developer's or the affirmative covenants of Developer's hereunder or to guarantee such performance unless and until such time as a Secured Lender takes possession or becomes the owner of the estate covered by its Mortgage. If the Secured Lender takes possession or becomes the owner of any portion of the Property, then from and after that date, the Secured Lender shall be obligated to comply with all provisions of this Agreement; provided that the Secured Lender shall not be responsible to the City for any unpaid monetary obligations of Developer that accrued prior to the date the Secured Lender became the fee owner of the Property. b) Nothing in Section 12.1.4(a) is intended, nor should be construed or applied, to Limit or restrict in any way the City's authority to terminate this Agreement, as against any Secured Lender as well as against Developer if any curable Event of Monetary Default or an Event of Non - Monetary Default is not completely cured within the Secured Lender's Cure Period. ARTICLE 13 TRANSFERS AND ASSIGNMENTS 13.1 Transfers and Assignments. 13.1.1 Not Severable from Ownership Interest in Property. This Agreement shall not be severable from Developer's interest in the Property and any transfer of the Property or any portion thereof shall automatically operate to transfer the benefits and burdens of this Agreement with respect to the transferred Property or transferred portions, as applicable. 13.1.2 Transfer Rights. Developer may freely sell, transfer, exchange, hypothecate, encumber or otherwise dispose of its interest in the Property, without the consent of the City. Developer shall, however, give written notice to the City, in accordance with Section 15.1, of any transfer of the Property, disclosing in such notice (a) the identity of the transferee of the Property (the "Property Transferee ") and (b) the address of the Property Transferee as applicable. 13.2 Release Upon Transfer. Upon the sale, transfer, exchange or hypothecation of the rights and interests of Developer to the Property, Developer shall be released from its obligations under this Agreement to the extent of such sale, transfer or exchange with respect to the Property if : (a) Developer has provided written notice of such transfer to City; and (b) the Property Transferee executes and delivers to City a 49 written agreement in which the Property Transferee expressly and unconditionally assumes all of the obligations of Developer under this Agreement with respect to the Property in the form of Exhibit "J" attached hereto (the "Assumption Agreement "). Upon such transfer of the Property and the express assumption of Developer's obligations under this Agreement by the transferee, the City agrees to look solely to the transferee for compliance with the provisions of this Agreement. Any such transferee shall be entitled to the benefits of this Agreement as "Developer" hereunder and shall be subject to the obligations of this Agreement. Failure to deliver a written Assumption Agreement hereunder shall not affect the transfer of the benefits and burdens as provided in Section 13. 1, provided that the transferor shall not be released from its obligations hereunder unless and until the executed Assumption Agreement is delivered to the City. ARTICLE 14 INDEMNITY TO CITY 14.1 Indemnity. Developer agrees to and shall defend, indemnify and hold harmless the City, its City Council, boards and commissions, officers, agents, employees, volunteers and other representatives (collectively referred to as "City Indemnified Parties ") from and against any and all loss, liability, damages, cost, expense, claims, demands, suits, attorney's fees and judgments (collectively referred to as "Damages "), including but not limited to claims for damage for personal injury (including death) and claims for property damage arising directly or indirectly from the following: (1) for any act or omission of Developer or those of its officers, board members, agents, employees, volunteers, contractors, subcontractors or other persons acting on its behalf (collectively referred to as the "Developer Parties ") which occurs during the Term and relates to this Agreement; (2) for any act or omission related to the operations of Developer Parties, including but not limited to the maintenance and operation of areas on the Property accessible to the public. Developer's obligation to defend, indemnify and hold harmless applies to all actions and omissions of Developer Parties as described above caused or alleged to have been caused in connection with the Project or Agreement, except to the extent any Damages are caused by the active negligence or willful misconduct of any City Indemnified Parties. This Section 14.1 applies to all Damages suffered or alleged to have been suffered by the City Indemnified Parties regardless of whether or not the City prepared, supplied or approved plans or specifications or both for the Project. 14.2 City's Right to Defense. The City shall have the right to approve legal counsel retained by Developer to defend any claim, action or proceeding which Developer is obligated to defend pursuant to Section 14. 1, which approval shall not be unreasonably withheld, conditioned or delayed. If any conflict of interest results during the mutual representation of the City and Developer in defense of any such action, or if the City is reasonably dissatisfied with legal counsel retained by Developer, the City shall have the right (a) at Developer's costs and expense, to have the City Attorney undertake and continue the City's defense, or (b) with Developer's approval, which shall not be 50 reasonably withheld or delayed, to select separate outside legal counsel to undertake and continue the City's defense. ARTICLE 15 GENERAL PROVISIONS 15.1 Notices. Formal notices, demands and communications between the Parties shall be deemed sufficiently given if delivered to the principal offices of the City or Developer, as applicable, by (i) personal service, or (ii) express mail, Federal Express, or other similar overnight mail or courier service, regularly providing proof of delivery, or (iii) registered or certified mail, postage prepaid, return receipt requested, or (iv) facsimile (provided that any notice delivered by facsimile is followed by a separate notice sent within twenty -four (24) hours after the transmission by facsimile delivered in one of the other manners specified above). Such notice shall be addressed as follows: To City: City of Santa Monica 1685 Main Street, Room 204 Santa Monica, CA 90401 Attention: City Manager Fax: (310) 917 -6640 With a Copy to: City of Santa Monica 1685 Main Street, Room 212 Santa Monica, CA 90401 Attn: Planning and Community Development Director Fax: (310) 458 -3380 To Developer: The Luzzatto Company, Inc. 3110 Main Street, Suite 200 Santa Monica, CA 90405 Attn: Marc Luzzatto Fax: (310) 829 -7151 Notice given in any other manner shall be effective when received by the addressee. Any Party may change the addresses for delivery of notices to such Party by delivering notice to the other Party in accordance with this provision. 15.2 Entire Agreement; Conflicts. This Agreement represents the entire agreement of the Parties. This Agreement integrates all of the terms and conditions 51 mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the Parties or their predecessors in interest with respect to all or any part of the subject matter hereof. Should any or all of the provisions of this Agreement be found to be in conflict with any other provision or provisions found in the Existing Regulations, then the provisions of this Agreement shall prevail. Should any of the Conditions of Approval set forth in Section B of Exhibit "D" attached hereto conflict with any of the Mitigation Measures set forth in Section A of Exhibit "D" attached hereto, the more stringent or exacting requirement shall control. 15.3 Binding Effect. The Parties intend that the provisions of this Agreement shall constitute covenants which shall run with the land comprising the Property during the Term for the benefit thereof and that the burdens and benefits thereof shall bind and inure to the benefit of all successors -in- interest to the Parties hereto. Every Party who now or hereafter owns or acquires any right, title, or interest in or to any portion of the Project during the Term is and shall be conclusively deemed to have consented and agreed to every provision contained herein, to the extent relevant to said right, title or interest, whether or not any reference to this Agreement is contained in the instrument by which such person acquired an interest in the Project. 15.4 Agreement Not for Benefit of Third Parties. This Agreement is made and entered into for the sole protection and benefit of Developer and the City and their respective successors and assigns. No other person shall have any right of action based upon any provision of this Agreement. 15.5 No Partnership or Joint Venture. Nothing in this Agreement shall be deemed to create a partnership or joint venture between the City and Developer or to render either Party liable in any manner for the debts or obligations of the other. 15.6 Estoppel Certificates. Either Party may, at any time, and from time to time, deliver written notice to the other Party requesting such Party to certify in writing (each, an "Estoppel Certificate "): (a) that this Agreement is in full force and effect, (b) that this Agreement has not been amended or modified either orally or in writing, or if so amended, identifying the amendments, (c) whether or not, to the knowledge of the responding Party, the requesting Party is in Breach or claimed Breach in the performance of its obligations under this Agreement, and, if so, describing the nature and amount of any such Breach or claimed Breach, and (d) whether or not, to the knowledge of the responding Party, any event has occurred or failed to occur which, with the passage of time or the giving of notice, or both, would constitute an Event of Monetary Default or an Event of Non - Monetary Default and, if so, specifying each such event. A Party receiving a request for an Estoppel Certificate shall execute and return such Certificate within thirty (30) days following the receipt of the request therefor. If the party receiving the request hereunder does not execute and return the certificate in such 30 -day period and if circumstances are such that the Party requesting the notice requires such notice as a matter of reasonable business necessity, the Party requesting the notice may seek a second request which conspicuously states "FAILURE TO EXECUTE THE REQUESTED ESTOPPEL CERTIFICATE WITHIN FIFTEEN (15) DAYS SHALL BE DEEMED WAIVER PURSUANT TO SECTIONS 15.6 AND 15.13 OF THE 52 DEVELOPMENT AGREEMENT" and which sets forth the business necessity for a timely response to the estoppel request. If the Party receiving the second request fails to execute the Estoppel Certificate within such 15 -day period, it shall be conclusively deemed that the Agreement is in full force and effect and has not been amended or modified orally or in writing, and that there are no uncured defaults under this Agreement or any events which, with passage of time of giving of notice, of both, would constitute a default under the Agreement. The City Manager shall have the right to execute any Estoppel Certificate requested by Developer under this Agreement. The City acknowledges that an Estoppel Certificate may be relied upon by any Property Transferee, Secured Lender or other party. 15.7 Time. Time is of the essence for each provision of this Agreement of which time is an element. 15.8 Excusable Delays. 15.8.1 In addition to any specific provisions of this Agreement, non- performance by Developer of its obligations under this Agreement shall be excused when it has been prevented or delayed in such performance by reason of any act, event or condition beyond the reasonable control of Developer (collectively, "Excusable Delays ") for any of the following reasons: a) War, insurrection, walk -outs, riots, acts of terrorism, floods, earthquakes, fires, casualties, acts of God, or similar grounds for excused performances; b) Governmental restrictions or moratoria imposed by the City or by other governmental entities or the enactment of conflicting State or Federal laws or regulations; C) The imposition of restrictions or moratoria by judicial decisions or by litigation, contesting the validity, or seeking the enforcement or clarification of, this Agreement whether instituted by Developer, the City or any other person or entity, or the filing of a lawsuit by any Party arising out of this Agreement or any permit or approval Developer deems necessary or desirable for the implementation of the Project; d) The institution of a referendum pursuant to Government Code Section 65867.5 or a similar public action seeking to in any way invalidate, alter, modify or amend the ordinance adopted by the City Council approving and implementing this Agreement; e) Inability to secure necessary labor, materials or tools, due to strikes, lockouts, or similar labor disputes; and f) Failure of the City to timely perform its obligations hereunder, including its obligations under Section 7.2 above 53 15.8.2 Under no circumstances shall the inability of Developer to secure financing be an Excusable Delay to the obligations of Developer. 15.8.3 In order for an extension of time to be granted for any Excusable Delay, Developer must deliver to the City written notice of the commencement of the Excusable Delay within sixty (60) days after the date on which Developer becomes aware of the existence of the Excusable Delay. The extension of time for an Excusable Delay shall be for the actual period of the delay. . 15.8.4 Nothing contained in this Section 15.8 is intended to modify the terms of either Section 5.1.2 or Section 5.5 of this Agreement. 15.9 Governing Law. This Agreement shall be governed exclusively by the provisions hereof and by the laws of the State of California. 15.10 Cooperation in Event of Legal Challenge to Agreement. If there is any court action or other proceeding commenced that includes any challenge to the validity, enforceability or any term or provision of this Agreement, then Developer shall indemnify, hold harmless, pay all costs actually incurred, and provide defense in said action or proceeding, with counsel reasonably satisfactory to both the City and Developer. The City shall cooperate with Developer in any such defense as Developer may reasonably request. 15.11 Attorneys' . If any Party commences any action for the interpretation, enforcement, termination, cancellation or rescission of this Agreement or for specific performance for the Breach of this Agreement, the prevailing Party shall be entitled to its reasonable attorneys' fees, litigation expenses and costs. Attorneys' fees shall include attorneys' fees on any appeal as well as any attorneys' fees incurred in any post - judgment proceedings to collect or enforce the judgment. Such attorneys' fees shall be paid whether or not such action is prosecuted to judgment. In any case where this Agreement provides that the City or Developer is entitled to recover attorneys' fees from the other, the Party so entitled to recover shall be entitled to an amount equal to the fair market value of services provided by attorneys employed by it as well as any attorneys' fees actually paid by it to third Parties. The fair market value of the legal services for public attorneys shall be determined by utilizing the prevailing billing rates of comparable private attorneys. 15.12 Recordation. The Parties shall cause this Agreement to be recorded against title to the Property in the Official Records of the County of Los Angeles. The cost, if any, of recording this Agreement shall be borne by Developer. 15.13 No Waiver. No waiver of any provision of this Agreement shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought and referring expressly to this Section 15.13. No delay or omission by either Party in exercising any right or power accruing upon non - compliance or failure to perform by the other Party under any of the provisions of this Agreement shall impair any such right or power or be construed to be a 54 waiver thereof, except as expressly provided herein. No waiver by either Parry of any of the covenants or conditions to be performed by the other Party shall be construed or deemed a waiver of any succeeding breach or nonperformance of the same or other covenants and conditions hereof of this Agreement. 15.14 Construction of this Agreement. The Parties agree that each Party and its legal counsel have reviewed and revised this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting Party shall not apply in the interpretation of this Agreement or any amendments or exhibits thereto. 15.15 Other Governmental Approvals. Developer may apply for such other permits and approvals as may be required for development of the Project in accordance with this Agreement from other governmental or quasi - governmental agencies having jurisdiction over the Property. The City shall reasonably cooperate with Developer in its endeavors to obtain such permits and approvals. 15.15.1 Further Assurances; Covenant to Sign Documents. Each Party shall take all actions and do all things, and execute, with acknowledgment or affidavit, if required, any and all documents and writings, which may be necessary or proper to achieve the purposes and objectives of this Agreement. 15.15.2 Processing. Upon satisfactory completion by Developer of all required preliminary actions and payments of appropriate processing fees, if any, the City shall, subject to all legal requirements, promptly initiate, diligently process, and complete at the earliest possible time all required steps, and expeditiously act upon any approvals and permits necessary for the development by Developer of the Project in accordance with this Agreement, including, but not limited to, the following: a) the processing of applications for and issuing of all Discretionary Approvals requiring the exercise ofjudgrnent and deliberation by City; b) the holding of any required public hearings; and C) the processing of applications for and issuing of all City Technical Permits requiring the determination of conformance with the Existing Regulations. 15.15.3 No Revocation. The City shall not revoke or subsequently disapprove any approval or future approval for the development of the Project or the Property once issued by the City provided that the development of the Project or the Property is in accordance with such approval. Any disapproval by the City shall state in writing the reasons for such disapproval and the suggested actions to be taken in order for approval to be granted. 15.15.4 Processing During Third Party Litigation. If any third party lawsuit is filed against the City or Developer relating to this Agreement or to other development issues affecting the Property, the City shall not delay or stop the development, processing or construction of the Property, or issuance of the City 55 Technical Permits, unless the third party obtains a court order preventing the activity. The City shall not stipulate to or fail to oppose the issuance of any such order. Notwithstanding the foregoing and without prejudice to the provisions of Section 15.8.1c), after service on the City or Developer of the initial petition or complaint challenging this Agreement or the Project, the Developer may apply to the Planning Director for a tolling of the applicable deadlines for Developer to otherwise comply with this Agreement. Within 40 days after receiving such an application, the Planning Director shall either toll the time period (for up to five years) during the pendency of the litigation or deny the requested tolling. 15.15.5 State, Federal or Case Law. Where any state, federal or case law allows the City to exercise any discretion or take any act with respect to that law, the City shall, in an expeditious and timely manner, at the earliest possible time, (i) exercise its discretion in such a way as to be consistent with, and carry out the terms of, this Agreement and (ii) take such other actions as may be necessary to carry out in good faith the terms of this Agreement. 15.16 Venue. Any legal action or proceeding among the Parties arising out of this Agreement shall be instituted in the Superior Court of the County of Los Angeles, State of California, in any other appropriate court in that County, or in the Federal District Court in the Central District of California. 15.17 Exhibits. The following exhibits which are part of this Agreement are attached hereto and each of which is incorporated herein by this reference as though set forth in full: Exhibit "A" Legal Description of the Property Exhibit `B" Project Plans Exhibit "C" Permitted Fees and Exactions Exhibit "D" Mitigation Measures and Conditions of Approval Exhibit "E" SMMC Article 9 (Planning and Zoning) Exhibit "F -1" Local Hiring Program for Construction Exhibit "F -2" Local Hiring Program for Permanent Employment Exhibit 1IG -1" Pennsylvania Avenue Extension Easement Area Exhibit "G -2" New Road Easement Area Exhibit "G -3" Public Use Areas Exhibit "H" Santa Monica Sign Code Exhibit "I" Construction Mitigation Plan Exhibit "J" Assignment and Assumption Agreement Exhibit "K" VTP Resident Relocation Program Exhibit "L" Tract Map 56 Exhibit "M" Exceptions to Title to Residual Parcel Except as to the Project Plans (attached hereto as Exhibit `B ") which shall be treated in accordance with Section 2.1 above, the text of this Agreement shall prevail in the event that any inconsistencies exist between the Exhibits and the text of this Agreement. 15.18 Counterpart Signatures. The Parties may execute this Agreement on separate signature pages which, when attached hereto, shall constitute one complete Agreement. 15.19 Certificate of Performance. Upon the completion of the Project, or any phase thereof, or upon performance of this Agreement or its earlier revocation and termination, the City shall provide Developer, upon Developer's request, with a statement ( "Certificate of Performance ") evidencing said completion, termination or revocation and the release of Developer from further obligations hereunder, except for any further obligations which survive such completion, termination or revocation. The Certificate of Performance shall be signed by the appropriate agents of Developer and the City and shall be recorded against title to the Property in the official records of Los Angeles County, California. Such Certificate of Performance is not a notice of completion as referred to in California Civil Code Section 3093. 15.20 Interests of Developer. Developer represents to the City that, as of the Effective Date, it is the owner of the entire Property, subject to encumbrances, easements, covenants, conditions, restrictions, and other matters of record. 15.21 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and Developer. During the Term of this Agreement, clarifications to this Agreement and the Existing Regulations may be appropriate with respect to the details of performance of the City and Developer. If and when, from time to time, during the term of this Agreement, the City and Developer agree that such clarifications are necessary or appropriate, they shall effectuate such clarification through operating memoranda approved in writing by the City and Developer, which, after execution, shall be attached hereto and become part of this Agreement and the same may be further clarified from time to time as necessary with future written approval by the City and Developer. Operating memoranda are not intended to and cannot constitute an amendment to this Agreement but mere ministerial clarifications, therefore public notices and hearings shall not be required for any operating memorandum. The City Attorney shall be authorized, upon consultation with, and approval of, Developer, to determine whether a requested clarification may be effectuated pursuant to the execution and delivery of an operating memorandum or whether the requested clarification is of such character to constitute an amendment of this Agreement which requires compliance with the provisions of Section 8.1 above. The authority to enter into such operating memoranda is hereby delegated to the City Manager and the City Manager is hereby authorized to execute any operating memoranda hereunder without further action by the City Council. 57 15.22 Acknowledgments, Agreements and Assurance on the Part of Developer. 15.22.1 Developer's Faithful Performance. The Parties acknowledge and agree that Developer's faithful performance in developing the Project on the Property and in constructing and installing certain public improvements pursuant to this Agreement and complying with the Existing Regulations will fulfill substantial public needs. The City acknowledges and agrees that there is good and valuable consideration to the City resulting from Developer's assurances and faithful performance thereof and that same is in balance with the benefits conferred by the City on the Project. The Parties further acknowledge and agree that the exchanged consideration hereunder is fair, just and reasonable. Developer acknowledges that the consideration is reasonably related to the type and extent of the impacts of the Project on the community and the Property, and further acknowledges that the consideration is necessary to mitigate the direct and indirect impacts caused by Developer on the Property. 15.22.2 Obligations to be Non - Recourse. As a material element of this Agreement, and in partial consideration for Developer's execution of this Agreement, the Parties each understand and agree that the City's remedies for breach of the obligations of Developer under this Agreement shall be limited as described in Sections 11.2 through 11.4 above. 15.23 Not a Public Dedication. Except for the dedications to be made by Developer pursuant to Section 2.6, nothing in this Agreement shall be deemed to be a gift or dedication of the Property, or of the Project, or any portion thereof, to the general public, for the general public, or for any public use or purpose whatsoever, it being the intention and understanding of the Parties that this Agreement be strictly limited to and for the purposes herein expressed for the development of the Project as private property. Developer shall have the right to prevent or prohibit the use of the Property, or the Project, or any portion thereof, including common areas and buildings and improvements located thereon, by any person for any purpose inimical to the development of the Project, including without limitation to prevent any person or entity from obtaining or accruing any prescriptive or other right to use the Property or the Project. Any portion of the Property to be conveyed to the City by Developer as provided in this Agreement, shall be held and used by the City only for the purposes contemplated herein or otherwise provided in such conveyance, and the City shall not take or permit to be taken (if within the power or authority of the City) any action or activity with respect to such portion of the Property that would deprive Developer of the material benefits of this Agreement or would materially and unreasonably interfere with the development of the Project as contemplated by this Agreement. 15.24 Other Agreements. The City acknowledges that certain additional agreements may be necessary to effectuate the intent of this Agreement and facilitate development of the Project. The City Manager or his /her designee is hereby authorized to prepare, execute, and record those additional agreements. 15.25 Severability and Termination. If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable, or if any 58 provision of this Agreement is superseded or rendered unenforceable according to any law which becomes effective after the Effective Date, the remainder of this Agreement shall be effective to the extent the remaining provisions are not rendered impractical to perform, taking into consideration the purposes of this Agreement. {signatures on nextpage} 59 This Agreement is executed by the Parties on the date first set forth above and is made effective on and as of the Effective Date. DEVELOPER: VILLAGE TRAILER PARK, LLC, a California limited liability company a Tenant in Common as to a 50% interest By: Name: Title: WX VILLAGE TRAILER PARK, a California corporation a Tenant in Common as to a 50% interest By: Name: Title: CITY: DRAFT CITY OF SANTA MONICA, a municipal corporation By: Name: Title: ATTEST: By: Name: DRAFT DRAFT City Clerk APPROVED AS TO FORM: By: DRAFT Name: City Attorney Signature page 1 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY All that certain real property situated in the County of Los Angeles, State of California, described as follows: PARCEL 1: THE SOUTHEASTERLY HALF OF THAT PORTION OF LOT 5 IN BLOCK 200 OF THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 39 PAGES 45 ET SEQ., OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE MOST NORTHERLY CORNER OF SAID LOT 5; THENCE SOUTHEASTERLY ALONG THE NORTHEASTERLY LINE OF SAID LOT, A DISTANCE OF 200 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTHWESTERLY PARALLEL WITH THE NORTHWESTERLY LINE OF SAID LOT, A DISTANCE OF 137.50 FEET; THENCE SOUTHEASTERLY PARALLEL WITH THE SAID NORTI4EASTERLY LINE THEREOF, A DISTANCE OF 355 FEET, MORE OR LESS, TO THE NORTHWESTERLY LINE OF THE SOUTHEASTERLY 85 FEET OF SAID LOT; THENCE NORTHEASTERLY ALONG SAID LAST MENTIONED NORTHWESTERLY LINE, A DISTANCE OF 137.50 FEET, MORE OR LESS, TO THE SAID NORTHEASTERLY LINE OF SAID LOT; THENCE NORTHWESTERLY ALONG SAID NORTHEASTERLY LINE, A DISTANCE OF 355 FEET, MORE OR LESS, TO THE TRUE POINT OF BEGINNING. EXCEPTING THEREFROM THE NORTHEASTERLY 25 FEET THEREOF, AS DESCRIBED IN THE DEED TO THE CITY OF SANTA MONICA, A MUNICIPAL CORPORATION, RECORDED AUGUST 11, 1955 AS INSTRUMENT NO. 414, OFFICIAL RECORDS. PARCEL 2: THOSE PORTIONS OF LOTS 4 AND 5, IN BLOCK 200, OF THE TOWN OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 39 PAGES 45 ET SEQ., OF MISCELLANEOUS RECORDS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS A WHOLE AS FOLLOWS: BEGINNING AT THE INTERSECTION OF THE NORTHEASTERLY LINE OF THE SOUTHWESTERLY 120.00 FEET OF SAID LOT 4 WITH THE NORTHWESTERLY LINE OF SAID LOT 4; THENCE NORTHEASTERLY ALONG SAID NORTHWESTERLY LINE 110.40 FEET; THENCE SOUTHEASTERLY, AT RIGHT Exhibit A Page I ANGLES TO SAID NORTHWESTERLY LINE, 120.00 FEET; THENCE NORTHEASTERLY, PARALLEL WITH SAID NORTHWESTERLY LINE, 79.88 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTHEASTERLY 519.85 FEET, MORE OR LESS, IN A DIRECT LINE TO A POINT IN THE SOUTHEASTERLY LINE OF SAID LOT 4 DISTANT SOUTHWESTERLY ALONG SAID SOUTHEASTERLY LINE 28.77 FEET FROM THE MOST EASTERLY CORNER OF SAID LOT 4; THENCE NORTHEASTERLY, ALONG THE SOUTHEASTERLY LINES OF SAID LOTS 4 AND 5, A DISTANCE OF 232.46 FEET, MORE OR LESS, TO THE SOUTHWESTERLY LINE OF THE NORTHEASTERLY 137.50 FEET OF SAID LOT 5; THENCE NORTHWESTERLY ALONG SAID SOUTHWESTERLY LINE 640.00 FEET, MORE OR LESS, TO THE NORTHWESTERLY LINE OF SAID LOT 5; THENCE SOUTHWESTERLY, ALONG THE NORTHWESTERLY LINES OF SAID LOTS 4 AND 5; A DISTANCE OF 232.32 FEET, MORE OR LESS, TO A LINE THAT IS DRAWN AT RIGHT ANGLES TO THE NORTHWESTERLY LINE OF SAID LOT 4AND THAT PASSES THROUGH THE TRUE POINT OF BEGINNING; THENCE SOUTHEASTERLY ALONG SAID LINE SO DRAWN, 120.00 FEET TO THE TRUE POINT OF BEGINNING. Exhibit A Page 2 EXHIBIT `B" PROJECT PLANS On file with City of Santa Monica Exhibit Page I EXHIBIT "C" PERMITTED FEES AND EXACTIONS Developer shall pay the following fees and charges that are within the City's jurisdiction and at the rate in effect at the time payments are made: (a) Upon submittal for Architectural Review Board (ARB) review, Developer shall pay City fees for processing of ARB applications; (b) Upon submittal for plan check, Developer shall pay City plan check fees; (c) Prior to issuance of construction permits, Developer shall pay the following City fees and all other standard fees imposed on similar development projects: • Building, Plumbing, Mechanical, Electrical, Grading, Seismic Mapping, Excavation and Shoring Permit fees (collected by Building & Safety) • Shoring Tieback fee (collected by EPWM) • Park and Recreation Facilities Tax (SMMC Section 6.80). WAIVED. • Condominium Tax (SMMC Section 6.76.010). WAIVED. • Construction and Demolition (C &D) Waste Management fee (SMMC Section 7.60.020) (collected by EPWM) (collected by EPWM) • Wastewater Capital Facilities Fee (SMMC Section 7 04.460) (collected by EPWM) • Water Capital Facilities Fee & Water Meter Instillation fee (Water Meter Permit fee) (SMMC Section 7.12.090) (collected by EPWM) • Fireline Meter fee (SMMC Section 7.12.090) (collected by EPWM) • Childcare Linkage Fee (SMMC Section 9.72.040). Developer shall execute a contract to pay the fee prior to issuance of a building permit; provided that Developer shall not be obligated to pay the Childcare Linkage Fee to the City, rather, the payment by Developer of the contribution in Section 2.6.20 of this Agreement shall constitute the Developer's full satisfaction of this fee payment obligation. • Cultural Arts Fee reduced to $100,000 (SMMC Section 9.04.10.20). Developer shall execute a contract to pay the fee prior to issuance of a building permit. Developer shall pay the fee prior to the issuance of a final certificate of occupancy for the Project. Exhibit C Page 1 (d) Upon inspection of the Project during the course of construction, City inspection fees. These fees shall be reimbursed to Developer in accordance with the City's standard practice should Developer not proceed with development of the Project. 2. Prior to issuance of permits for any construction work in the public right -of -way, or use of public property, Developer shall pay the following City fees: • Use of Public Property Permit fees (SMMC 7.04.670) (EPWM) • Utility Excavation Permit fee (SMMC 7.04.010) (EPWM) • Street Permit fee (SMMC 7.04.790) (EPWM) 3. The Developer shall reimburse the City for its actual costs to monitor environmental mitigation measures. The City shall bill the developer for staff time and any material used pursuant to the hourly fees in effect at the time monitoring is performed. Developer shall submit payment to the City within 30 days. 4. Developer shall reimburse the City for its ongoing actual costs to monitor the project's compliance with this Development Agreement. The City shall bill Developer for staff time and any material used pursuant to the hourly fees in effect at the time monitoring is performed. Developer shall submit payment to the City within 30 days. Exhibit C Page 2 EXHIBIT "D" MITIGATION MEASURES AND CONDITIONS OF APPROVAL Exhibit D Page I SECTION A - MITIGATION MEASURES BRI Prior to removal, trees on the project site will be inspected for bird nests by a qualified biologist. Inspection of the trees shall occur prior to the typical breeding /nesting season (March 1" through August 30th). If nesting is observed, the biologist shall recommend a buffer area with a specified radius to be established, within which no disturbance or intrusion shall be allowed until the young had fledged and left the nest or it is determined by the monitoring biologist that the nest has failed. If no nesting is observe, trees to be removed from within the project site shall be netted to prevent birds from inhabiting the trees prior to removal and construction. 2. CON1 The construction contractor shall utilize super - compliant architectural coatings as defined by the SCAQMD (VOC standard of less than ten grams per liter ) CON2 Water or a stabilizing agent shall be applied to exposed surfaces at least two times per day to prevent generation of dust plumes. 4. CON3 The construction contractor shall utilize at least one of the following measures at each vehicle egress from the project site to a paved public road: • Install a pad consisting of washed gravel maintained in clean condition to a depth of at least six inches and extending at least 30 feet wide and at least 50 feet long; • Pave the surface extending at least 100 feet and at least 20 feet wide; • Utilize a wheel shaker /wheel spreading device consisting of raised dividers at least 24 feet long and 10 feet wide to remove bulk material from tires and vehicle undercarriages; or Install a wheel washing system to remove bulk material from tires and vehicle undercarriages. 5. CON4 All haul trucks hauling soil, sand, and other loose materials shall be covered (e.g., with tarps or other enclosures that would reduce fugitive dust emissions). 6. CON5 Construction activity on unpaved surfaces shall be suspended when wind speed exceed 25 miles per hour (such as instantaneous gusts). CON6 Ground cover in disturbed areas shall be replaced as quickly as possible. Otherwise, non -toxic chemical soil stabilizers shall be applied according to manufacturer specifications, to all inactive portions of the construction site (previously graded areas inactive for four days or more). Exhibit D Page 2 8. CON7 Heavy -duty equipment operations shall be suspended during first and second stage smog alerts. 9. CON8 All construction equipment shall be equipped with mufflers and other suitable noise attenuation devices. 10. CON9 Grading and construction contractors shall use quieter equipment as opposed to noisier equipment (such as rubber -tired equipment rather than metal - tracked equipment). 11. CON10 The construction contractor shall use on -site electrical sources to power equipment rather than diesel generators when electricity is readily available. 12. CON 11 Construction haul truck and materials delivery traffic shall avoided residential areas whenever feasible 13. CON 12 Construction noise levels shall not exceed the City of Santa Monica's noise standards except for between the hours of 10:00 a.m. and 3:00 p.m., Monday through Friday, in accordance with Section 4.12.110(d) of the Santa Monica Municipal Code 14. CON 13 In accordance with Santa Monica Municipal Code Section 4.12.120, the project applicant shall be required to post a sign informing all workers and subcontractors of the time restrictions for construction activities. The sign shall also include the City telephone numbers where violations can be reported and complaints associated with construction noise can be submitted 15. CON 14 The applicant shall prepare, implement, and maintain a Construction Impact Mitigation Plan which shall be designed to: • Prevent material traffic impacts on the surrounding roadway network; • Minimize parking impacts both to public parking and access to private parking to the greatest extent practicable; • Ensure safety for both those constructing the project and the surrounding community; and • Prevent substantial truck traffic through residential neighborhoods. • The Construction Impact Mitigation Plan shall be subject to review and approval by the following City departments: Environmental and Public Works Management (EPWM); Fire; Planning and Community Development; and Police to ensure that the Plan has been designed in accordance with this mitigation measure. This review shall occur prior to commencement of any construction staging for the project. It shall, at a minimum, include the following: Exhibit D Page 3 Ongoing Requirements Throughout the Duration of Construction A detailed traffic control plan for work zones shall be maintained which includes at a minimum accurate existing and proposed: parking and travel lane configurations; warning, regulatory, guide and directional signage; and area sidewalks, bicycle lanes and parking lanes. The plan shall include specific information regarding the project's construction activities that may disrupt normal pedestrian and traffic flow and the measures to address these disruptions. Such plans must be reviewed and approved by the Transportation Management Division prior to commencement of construction and implemented in accordance with this approval. • Work within the public right -of -way shall be performed between 9:00 a.m. and 4:00 p.m., including: dirt and demolition material hauling and construction material delivery. Work within the public right -of -way outside of these hours shall only be allowed after the issuance of an After Hours Permit. • Streets and equipment shall be cleaned in accordance with established EPWM requirements. • Trucks shall only travel on a City- approved construction route. Truck queuing /staging shall not be allowed on Santa Monica streets. Limited queuing may occur on the construction site itself. • Materials and equipment shall be minimally visible to the public; the preferred location for materials is to be on -site, with a minimum amount of materials within a work area in the public right -of -way, subject to a current Use of Public Property Permit. • Any requests for work before or after normal construction hours within the public right -of -way shall be subject to review and approval through the After Hours Permit process administered by the Building and Safety Division. • Provision of off - street parking for construction workers, which may include the use of a remote location with shuttle transport to the site, if determined necessary by the City of Santa Monica. Project Coordination Elements That Shall Be -Implemented Prior to Commencement of Construction Exhibit D Page 4 • Advise the traveling public of impending construction activities (e.g. information signs, portable message signs, media listing /notification, implementation of an approved traffic control plan). • Approval from the City through issuance of a Use of Public Property Permit, Excavation Permit, Sewer Permit or Oversize Load Permit, as well as any Caltrans Permits required, for any construction work requiring encroachment into public rights -of -way, detours or any other work within the public right -of- way. • Timely notification of construction schedules to all affected agencies (e.g., Big Blue Bus, Police Department, Fire Department, Environmental and Public Works Management Department, and Planning and Community Development Department) and to all owners and residential and commercial tenants of property within a radius of 500 feet. • Coordination of construction work with affected agencies in advance of start of work. Approvals may take up to two weeks per each submittal. • Approval by the Transportation Management Division of any haul routes involving earth, concrete or construction materials, and equipment hauling 16. GSl At the time of final building plan check, a site - specific Geotechnical Report shall be submitted to the City of Santa Monica Building and Safety Division for review and approval. The Geotechnical Report shall be prepared in accordance with the City's Guidelines for Geotechnical Reports and at a minimum shall address: seismic hazards (fault management zone; groundshaking; liquefaction; subsidence, etc); hydrocollapse potential; and expansive soils. Information obtained from the Geotechnical Report shall be incorporated into the design and construction of the proposed project. The recommendations provided in the Geotechnical Report as well as Santa Monica Building Code requirements regarding foundation design, retaining wall design, excavations and shoring shall be fully implemented. 17. GS2 Construction and excavation activities shall adhere to the Best Management Practices (BMPs) set forth by the City of Santa Monica Urban Runoff Pollution Ordinance (Chapter 7.10 of the Santa Monica Municipal Code). Such BMPs include using plastic coverings to prevent erosion of any unprotected area, such as mounds of dirt or dumpsters, along with devices designed to intercept and safely divert runoffs. 18. GS3 All grading activities shall be scheduled for completion before the start of the rainy season (between November and April) to the extent feasible. If grading events do occur during the raining season, a rain event action plan shall be prepared and designed to protect all exposed portions of the site within 48 hours of any likely precipitation event forecast of 50 percent or greater probability Exhibit D Page 5 19. GS4 An erosion control plan that identifies BMPs shall be implemented to the satisfaction of the City of Santa Monica Building and Safety Department to minimize potential erosion during construction. The erosion control plan shall be a condition prior to issuance of any grading permit. 20. GS5 Provisions shall be made for adequate surface drainage away from the areas of excavation as well as protection of excavated areas from flooding. The grading contractor shall control surface water runoff and the transport of silt and sediment. 21. HMI Prior to issuance of a demolition permit, for the permanent structures on the project site a Licensed Asbestos Inspector shall be retained to determine the presence of asbestos and asbestos containing materials (ACM) within structures to be demolished that are present on the project site. If asbestos is discovered, a Licensed Asbestos Abatement Contractor shall be retained to safely remove all asbestos from the development site. 22. HM2 Prior to issuance of a demolition permit, lead -based paint testing shall be conducted for existing structures and trailers to be demolished. All materials identified as containing lead shall be removed by a licensed lead -based paintimaterials abatement contractor. 23. HM3 An operations and maintenance program shall be implemented in order to safely manage the suspect ACMs and LBP located at the project site. 24. HW1 If temporary and/or permanent dewatering on the project site is required, the Applicant shall obtain a dewatering permit from the City of Santa Monica Water Resources Protection Program prior to the issuance of a grading permit. Soil and groundwater testing to a minimum depth of 50 feet shall be conducted to the satisfaction of the Water Resources Protection Program staff. If contaminated groundwater is discovered on -site, treatment and discharge of the contaminated groundwater shall be conducted in compliance with applicable regulatory requirements including the Los Angeles Regional Water Quality Control Board standards. 25. T1 23'd Street /Ocean Park Boulevard. Add an exclusive right -turn lane on the eastbound approach of Ocean Park Boulevard. The mitigation measure was proposed due to the heavy existing eastbound through movement volumes. The proposed mitigation would require shifting the existing eastbound through lane approach approximately two feet to the north to provide room for a functional right -turn lane. The proposed mitigation would require implementation of peak period parking restrictions for the first 75 feet of parking (approximately three parking spaces) closest to the intersection (eastbound on Ocean Park Boulevard, west of 23rd Street) so vehicles can make eastbound right -turns onto 23`d Street from Ocean Park Boulevard during the peak periods or when there is available space outside of peak periods. The proposed mitigation measure would require Exhibit D Page 6 some restriping and peak period parking restriction signage at the eastbound approach of this intersection. 26. T2 Cloverfield Boulevard /Santa Monica Boulevard. The left -turn phasing for the westbound leg of the Cloverfield Boulevard /Santa Monica Boulevard intersection shall be modified from a protected phase to a permitted- protected phase to decrease delay at the worst approach of the intersection to address the AM peak hour impact. The City shall monitor the operation of this intersection and adjust the signal timing and phasing as appropriate. Implementation of this mitigation measure would necessitate the provision of a combination of new signage, controller cabinets, poles, mast arms, detectors, and/or signal heads. Furthermore, this mitigation measure will provide the City greater flexibility in adjusting traffic signal operations to address peak hour congestion issues. 27. T3 Stewart Street /Olympic Boulevard. The traffic signal at the Stewart Street/Olympic Boulevard intersection shall be modified to provide protected - permitted left -turn phasing for northbound and eastbound approaches to decrease delay at the worst approaches of the intersection to address the impact. The City shall monitor the operation of this intersection and adjust the signal timing and phasing as appropriate. Implementation of this mitigation measure would necessitate the provision of a combination of new signage, controller cabinets, poles, mast arms, detectors, and /or signal heads. Furthermore, this mitigation measure will provide the City greater flexibility in adjusting traffic signal operations to address peak hour congestion issues. 28. T4 Centinela Avenue/1 -10 Westbound Ramps. The traffic signal at the Centinela Avenue /I -10 Westbound Ramps intersection shall be modified to provide protected - permitted left -turn phasing for northbound approach to decrease delay at the worst approach of the intersection to address. The City shall monitor the operation of this intersection and adjust the signal timing and phasing as appropriate. The implementation of the permitted - protected left -turn phasing would necessitate the provision of some combination of new signage, controller cabinets, poles, mast arms, detectors, and /or signal heads. Furthermore, this mitigation measure will provide the City greater flexibility in adjusting traffic signal operations to address peak hour congestion issues. Since this intersection is shared by the City of Santa Monica and City of Los Angeles, this mitigation measure must be approved by LADOT. The applicant shall use its good faith reasonable efforts to obtain such approval from the City of Los Angeles. If timely approved by the City of Los Angeles, such improvements shall be completed prior to issuance of a certificate of occupancy for the project 29. TS 261" Street & Wilshire Boulevard. Convert the protected permitted phasing for the eastbound and westbound left turn movements to permitted phasing. The City shall monitor the operation of this intersection and adjust the signal timing and phasing as appropriate. This mitigation measure would require temporary signage during a period of adjustment for motorists and the provision of some Exhibit D Page 7 combination of new signage, controller cabinets, poles, mast arms, detectors, and /or signal heads. Furthermore, this mitigation measure will provide the City greater flexibility in adjusting traffic signal operations to address peak hour congestion issues 30. T6 Barrington Avenue /Olympic Boulevard. Convert the eastbound left -turn phasing from permitted to protected permitted. The City shall monitor the operation of this intersection and adjust the signal timing and phasing as appropriate. The implementation of the protected - permitted left -turn phasing would necessitate the provision of some combination of new signage, controller cabinets, poles, mast arms, detectors and /or signal heads. Furthermore this mitigation measure will provide the City greater flexibility in adjusting traffic signal operations to address peak hour congestion issues. The applicant shall use its good faith reasonable efforts to obtain such approval from the City of Los Angeles. If timely approved by the City of Los Angeles, such improvements shall be completed prior to issuance of a certificate of occupancy for the project. 31. CUL -1 If archaeological materials are discovered during project grading and excavation activities, all work within a 100 -meter radius shall be temporarily ceased. The materials shall be treated in accordance with Federal, State, and local guidelines, including those set forth in California Public Resources Code Section 21083.2. In addition, if it is determined that an archaeological site is a historical resource, the provisions of Section 21084.1 of the Public Resources Code and CEQA Guidelines Section 15064.5 would be implemented. 32. CUL -2 If paleontological materials are discovered during project grading and excavation activities, all work within a 100 -meter radius shall be temporarily ceased. A qualified paleontologist shall be secured by contacting the Los Angeles County Natural History Museum to assess the resources and evaluate the impact. The qualified paleontologist shall prepare a report of the findings and a copy of the report shall be submitted to the Los Angeles County Natural History Museum. 33. Mitigation Monitoring and Reporting Program. Pursuant to the requirements of Public Resources Code Section 21081.6, the City Planning Division will coordinate a monitoring and reporting program regarding any required changes to the project made in conjunction with project approval and any condition's of approval, including those conditions intended to mitigate or avoid significant effects on the environment. This program shall include, but is not limited to, ensuring that the City Planning Division itself and other City divisions and departments such as the Building and Safety Division, the Department of Environmental and Public Works, the Fire Department, the Police Department, the Planning and Community Development Department and the Finance Department are aware of project requirements which must be satisfied prior to issuance of a Building Permit, Certificate of Occupancy, or other permit, and that other responsible agencies are also informed of conditions relating to their responsibilities. Project owner shall demonstrate compliance with conditions of Exhibit D Page 8 approval in a written report submitted to the Planning Director and Building Officer prior to issuance of a Building Permit or Certificate of Occupancy, and, as applicable, provide periodic reports regarding compliance with such conditions. SECTION B - CONDITIONS OF APPROVAL Project Specific Conditions 1. The project shall provide the Significant Project Features and LUCE Community Benefits as established in Section 2.6 of this Agreement. 2. The Architectural Review Board shall pay particular attention to the following design elements of the project: • The interior elevations of Buildings A and B to ensure that the pedestrian pathway remains inviting and is designed at a human - scale. • The use of ground floor commercial space to ensure that it promotes a pedestrian oriented design consistent with the strategies for creating the Bergamot Transit Village. • The ground floor residential units throughout the project to ensure that they are designed in a pedestrian- oriented manner consistent with the strategies for creating the Bergamot Transit Village. • The east elevation of Building B to ensure that there are sufficient building stepbacks and building articulation. • The scale and amount of applied building colour and materials to reduce the appearance of repetitive elevations and horizontal masses such as the east elevation of Building B. • The scale of the buildings adjacent to Pennsylvania Avenue to ensure a human -scale environment. • Openness of the south lobby of Building B to reinforce the sense of an open connection between the Building B residential courtyard and Pennsylvania Avenue. • Treatments for the long interior hallway of Building B in order to introduce natural light • Ensure pedestrian orientation and clear access despite the change in grade between the Colorado- facing retail space on the east side of Building B and the sidewalk and the change in grade on the walkway on the east side of Building B between Pennsylvania Avenue and the sidewalk on Colorado Avenue. Exhibit D Page 9 3. 'Developer shall execute a deed restriction with the City for 16 of the Rental Housing Units to be restricted as 7 Extremely Low Income Units and 9 Very Low Income Units, to be recorded before the issuance of a Certificate of Occupancy for the Project. 4. No Certificate of Occupancy may be issued for Buildings A or B until Building C is issued a Certificate of Occupancy. Until the Park Transfer Date, Developer shall continue to operate the retained mobilehome park on the Residual Parcel consistent with the requirements of state law. In the event this condition is invalidated by a court of competent jurisdiction, the Park Transfer Date shall be advanced to the date of final judgment, and Developer shall transfer fee title to the Residual Parcel to the City or its designee pursuant to Section 2.6.2(n), regardless of whether Developer can satisfy the requirements of Section 2.6.2(n)(ii) and regardless of Developer's ability to deliver title to the residual Parcel in accordance with the requirements of Section 2.6.2(n)(ix). 6. No building permit may be approved or issued unless and until the Developer has demonstrated to the satisfaction of the City Attorney's Office that it has obtained possession of all of the real property required for the development of the Project Property. 7. Prior to issuance of a building permit for the Project, Developer shall provide to the City a title policy showing that Developer owns fee title to the entire Project Property. Administrative Conditions 8. In the event permittee violates or fails to comply with any conditions of approval of this permit, no further permits, licenses, approvals or certificates of occupancy shall be issued until such violation has been fully remedied. Conformance with Approved Plans 9. This approval is for those plans dated November 7, 2012, a copy of which shall be maintained in the files of the City Planning Division. Project development shall be consistent with such plans, except as otherwise specified in these conditions of approval. 10. Minor amendments to the plans shall be subject to approval by the Director of Planning. A significant change in the approved concept shall be subject to review as provided in the Development Agreement. Construction shall be in conformance with the plans submitted or as modified in accordance with the Development Agreement. 11. Except as otherwise provided by the Development Agreement, project plans shall be subject to complete Code Compliance review when the building plans are submitted for plan check and shall comply with all applicable provisions of Article IX of the Municipal Code and all other pertinent ordinances and General Plan policies of the City of Santa Monica prior to building permit issuance. Exhibit D Page 10 Fees 12. No building permit shall be issued for the project until the developer complies with the requirements of Part 9.04.10.20 of the Santa Monica Municipal Code, Private Developer Cultural Arts Requirement. If the developer elects to comply with these requirements by providing on -site public art work or cultural facilities, no final City approval shall be granted until such time as the Director of the Community and Cultural Services Department issues a notice of compliance in accordance with Part 9.04.10.20. 13. No building permit shall be issued for the project until the developer complies with the requirements of Chapter 9.72 of the Santa Monica Municipal Code, the Child Care Linkage Program. Cultural Resources 14. Except as otherwise provided by the Development Agreement, no demolition of buildings or structure built 40 years of age or older shall be permitted until the end of a 60 -day review period by the Landmarks Commission to determine whether an application for landmark designation shall be filed. If an application for landmark designation is filed, no demolition shall be approved until a final determination is made by the Landmarks Commission on the application. 15. If any archaeological remains are uncovered during excavation or construction, work in the affected area shall be suspended and a recognized specialist shall be contacted to conduct a survey of the affected area at project's owner's expense. A determination shall then be made by the Director of Planning to determine the significance of the survey findings and appropriate actions and requirements, if any, to address such findings. Project Operations 16. The operation shall at all times be conducted in a manner not detrimental to surrounding properties or residents by reason of lights, noise, activities, parking or other actions. 17. The project shall at all times comply with the provisions of the Noise Ordinance (SMMC Chapter 4.12). Final Design 18. Plans for final design, landscaping, screening, trash enclosures, and signage shall be subject to review and approval by the Architectural Review Board. 19. Landscaping plans shall comply with Subchapter 9.04.10.04 (Landscaping Standards) of the Zoning Ordinance including use of water- conserving landscaping materials, landscape maintenance and other standards contained in the Subchapter. Exhibit Page 11 20. Refuse areas, storage areas and mechanical equipment shall be screened in accordance with SMMC Section 9.04.10.02.130, 140, and 150. Refuse areas shall be of a size adequate to meet on -site need, including recycling. The Architectural Review Board in its review shall pay particular attention to the screening of such areas and equipment. Any rooftop mechanical equipment shall be minimized in height and area, and shall be located in such a way as to minimize noise and visual impacts to surrounding properties. Unless otherwise approved by the Architectural Review Board, rooftop mechanical equipment shall be located at least five feet from the edge of the roof. Except for solar hot water heaters, no residential water heaters shall be located on the roof. 21. No gas or electric meters shall be located within the required front or street side yard setback areas. The Architectural Review Board in its review shall pay particular attention to the location and screening of such meters. 22. Prior to consideration of the project by the Architectural Review Board, the applicant shall review disabled access requirements with the Building and Safety Division and make any necessary changes in the project design to achieve compliance with such requirements. The Architectural Review Board, in its review, shall pay particular attention to the aesthetic, landscaping, and setback impacts of any ramps or other features necessitated by accessibility requirements. 23. As appropriate, the Architectural Review Board shall require the use of anti - graffiti materials on surfaces likely to attract graffiti. Construction Plan Requirements 24. Final building plans submitted for approval of a building permit shall include on the plans a list of all permanent mechanical equipment to be placed indoors which may be heard outdoors. Demolition Requirements 25. Until such time as the demolition is undertaken, and unless the structure is currently in use, the existing structure shall be maintained and secured by boarding up all openings, erecting a security fence, and removing all debris, bushes and planting that inhibit the easy surveillance of the property to the satisfaction of the Building and Safety Officer and the Fire Department. Any landscaping material remaining shall be watered and maintained until demolition occurs. 26. Prior to issuance of a demolition permit, applicant shall prepare for Building Division approval a rodent and pest control plan to insure that demolition and construction activities at the site do not create pest control impacts on the project neighborhood. Construction Period Exhibit Page 12 27. Any construction related activity in the public right -of -way will be required to acquire the approvals by the City of Santa Monica, including but not limited to: Use of Public Property Permits, Sewer Permits, Excavation Permits, Alley Closure Permits, Street Closure Permits, and Temporary Traffic Control Plans. 28. Immediately after demolition and during construction, a security fence, the height of which shall be the maximum permitted by the Zoning Ordinance, shall be maintained around the perimeter of the lot. The lot shall be kept clear of all trash, weeds, etc. 29. Vehicles hauling dirt or other construction debris from the site shall cover any open load with a tarpaulin or other secure covering to minimize dust emissions. Immediately after commencing dirt removal from the site, the general contractor shall provide the City of Santa Monica with written certification that all trucks leaving the site are covered in accordance with this condition of approval. 30. During demolition, excavation, and construction, this project shall comply with SCAQMD Rule 403 to minimize fugitive dust and associated particulate emission, including but not limited to the following: 31. All material excavated or graded shall be sufficiently watered to prevent excessive amounts of dust. Watering shall occur at least three times daily with complete coverage, preferably at the start of the day, in the late morning, and after work is done for the day. 32. All grading, earth moving, or excavation activities shall cease during periods of high winds (i.e., greater than 20 mph measured as instantaneous wind gusts) so as to prevent excessive amounts of dust. 33. Soils stockpiles shall be covered. 34. Onsite vehicle speeds shall be limited to 15 mph. 35. Wbeel washers shall be installed where vehicles enter and exit the construction site onto paved roads or wash off trucks and any equipment leaving the site each trip. 36. An appointed construction relations officer shall act as a community liaison concerning onsite construction activity including resolution of issues related to PM10 generation. 37. Streets shall be swept at the end of the day using SCAQMD Rule 1186 certified street sweepers or roadway washing trucks if visible soil is carried onto adjacent public paved roads (recommend water sweepers with reclaimed water). 38. All active portions the construction site shall be sufficiently watered three times a day to prevent excessive amounts of dust. 39. Developer shall prepare a notice, subject to the review by the Director of Planning and Community Development, that lists all construction mitigation requirements, Exhibit D Page 13 permitted hours of construction, and identifies a contact person at City Hall as well as the developer who will respond to complaints related to the proposed construction. The notice shall be mailed to property owners and residents of the neighborhood within 1000' of the Project at least five (5) days prior to the start of construction. 40. A sign shall be posted on the property in a manner consistent with the public hearing sign requirements which shall identify the address and phone number of the owner and /or applicant for the purposes of responding to questions and complaints during the construction period. Said sign shall also indicate the hours of permissible construction work. 41. A copy of these conditions shall be posted in an easily visible and accessible location at all times during construction at the project site. The pages shall be laminated or otherwise protected to ensure durability of the copy. 42. No construction - related vehicles may be parked on the street at any time or on the subject site during periods of peak parking demand. All construction - related vehicles must be parked for storage purposes at on offsite location on a private lot for the duration of demolition and construction. The offsite location shall be approved as part of the Department of Environmental and Public Works review of the construction period mitigation plan and by the Department of City Planning if a Temporary Use Permit is required. 43. Construction period signage shall be subject to the approval of the Architectural Review Board. Standard Conditions 44. Mechanical equipment shall not be located on the side of any building which is adjacent to a residential building on the adjoining lot, unless otherwise permitted by applicable regulations. Roof locations may be used when the mechanical equipment is installed within a sound -rated parapet enclosure. 45. Final approval of any mechanical equipment installation will require a noise test in compliance with SMMC Section 4.12.040. Equipment for the test shall be provided by the owner or contractor and the test shall be conducted by the owner or contractor. A copy of the noise test results on mechanical equipment shall be submitted to the Community Noise Officer for review to ensure that noise levels do not exceed maximum allowable levels for the applicable noise zone. 46. The property owner shall insure any graffiti on the site is promptly removed through compliance with the City's graffiti removal program. Condition Monitoring 47. The applicant authorizes reasonable City inspections of the property to ensure compliance with the conditions of approval imposed by the City in approving this project and will bear the reasonable cost of these inspections. Exhibit D Page 14 STRATEGIC AND TRANSPORTATION PLANNING 48. Consistent with the requirements of the Development Agreement, Final auto parking, bicycle parking, and loading layouts and specification shall be subject to the review and approval of the Strategic and Transportation Planning Division: http: / /www. smgov.net/uploadedFile s/Departments /Tran sportation /Transportati on_Ma nagement/ParkingStandards.pdf 49. Consistent with the requirements of the Development Agreement, Where a driveway, garage, parking space or loading zone intersects with the public right -of -way at the alley or sidewalk, hazardous visual obstruction triangles shall be provided in accordance with SMMC Section 9.04.10.02.090. Please reference the following standards: http: / /www. smgov.net/uploade dF iles/Departments /Transportation /Transportation_Ma nagemenUffVO.pdf 50. Consistent with the requirements of the Development Agreement, Slopes of all driveways and ramps used for ingress or egress of parking facilities shall be designed in accordance with the standards established by the Strategic and Transportation Planning Manager but shall not exceed a twenty percent slope. Please reference the following standards: http: / /www. smgov. net/upl o adedF ile s/ Departments/ Transportation/Transportation_Ma nagement/RampSlope.pdf PUBLIC LANDSCAPE 51. Street trees shall be maintained, relocated or provided as required in a manner consistent with the City's Urban Forest Master Plan, per the specifications of the Public Landscape Division of the Community & Cultural Services Department and the City's Tree Code (SMMC Chapter 7.40). No street trees shall be removed without the approval of the Public Landscape Division. 52. Prior to the issuance of a demolition permit all street trees that are adjacent to or will be impacted by the demolition or construction access shall have tree protection zones established in accordance with the Urban Forest Master Plan. All tree protection zones shall remain in place until demolition and /or construction has been completed. OFFICE OF SUSTAINABILITY AND THE ENVIRONMENT 53. Developer shall enroll the property in the Savings By Design incentive program where available through Southern California Edison prior to submittal of plans for Architectural Review. Developer shall execute an incentive agreement with Southern California Edison prior to the issuance of a building permit. 54. The project shall comply with requirements in section 8.106 of the Santa Monica Municipal code, which adopts by reference the California Green Building Standards Code and which adds local amendments to that Code. In addition, the project shall meet the landscape water conservation and construction and Exhibit D Page 15 demolition waste diversion requirements specified in Section 8.108 of the Santa Monica Municipal Code. RENT CONTROL 55. Pursuant to SMMC Section 4.24.030, prior to receipt of the final permit necessary to demolish, convert, or otherwise remove a controlled rental unit(s) from the housing market, the owner of the property shall first secure a removal permit under Section 1803(t), an exemption determination, an approval of a vested rights claim from the Rent Control board, or have withdrawn the controlled rental unit(s) pursuant to the provisions of the Ellis Act. HOUSING AND ECONOMIC DEVELOPMENT 56. To ensure AHPP compliance, a monitoring fee will be applied to each affordable unit produced. A separate fee has been established for a new unit start -up, subsequent re- occupancy /resale and an annual monitoring fee. The Administrative Guidelines for the AHPP (fee structures, costs, and affordability limits) are updated annually and available on the Santa Monica House and Economic Development website. PUBLIC WORKS General Conditions 57. Developer shall be responsible for the payment of the following Public Works Department (PWD) permit fees prior to issuance of a building permit: a. Water Services b. Wastewater Capital Facility C. Water Demand Mitigation d. Fire Service Connection e. Tieback Encroachment f. Encroachment of on -site improvements into public right -of -way g. Construction and Demolition Waste Management — If the valuation of a project is at least $50,000 or if the total square feet of the project is equal to or greater than 1000 square feet, then the owner or contractor is required to complete and submit a Waste Management Plan. All demolition projects are required to submit a Waste Management Plan. A performance deposit is collected for all Waste Management Plans equal to 3% of the project value, not to exceed $30,000. All demolition only permits require a $1,000 deposit or $1.00 per square foot, whichever is the greater of the two. Some of these fees shall be reimbursed to developer in accordance with the City's standard practice should Developer not proceed with development of the Project. In order to receive a refund of the Construction and Demolition performance deposit, the Exhibit D Page 16 owner or contractor must provide receipts of recycling 70% of all materials listed on the Waste Management Plan. 58. Any work or use of the public right -of -way including any proposed encroachments of on -site improvements into the public right -of -way will require a permit from the Public Works Department (PWD) - Administrative Services Division. 59. Plans and specifications for all offsite improvements shall be prepared by a Registered Civil Engineer licensed in the State of California for approval by the City Engineer prior to issuance of a building permit. 60. Immediately after demolition and during construction, a security fence, the height of which shall be the maximum permitted by the Zoning Ordinance, shall be maintained around the perimeter of the lot. The lot shall be kept clear of all trash, weeds, etc. 61. A sign shall be posted on the property in a manner consistent with the public hearing sign requirements, which shall identify the address and phone number of the owner, developer and contractor for the purposes of responding to questions and complaints during the construction period. Said sign shall also indicate the hours of permissible construction work. 62. Prior to the demolition of any existing structure, the applicant shall submit a report from an industrial hygienist to be reviewed and approved as to content and form by the Office of Sustainability and Environment Division. The report shall consist of a hazardous materials survey for the structure proposed for demolition. The report shall include a section on asbestos and in accordance with the South Coast AQMD Rule 1403, the asbestos survey shall be performed by a state Certified Asbestos Consultant (CAC). The report shall include a section on lead, which shall be performed by a state Certified Lead Inspector /Assessor. Additional hazardous materials to be considered by the industrial hygienist shall include: mercury (in thermostats, switches, fluorescent light), polychlorinated biphenyls (PCBs) (including light Ballast), and fuels, pesticides, and batteries. Water Resources 63. Connections to the sewer or storm drains require a sewer permit from the PWD - Civil Engineering Division. Connections to storm drains owned by Los Angeles County require a permit from the L.A. County Department of Public Works. 64. Parking areas and structures and other facilities generating wastewater with potential oil and grease content are required to pretreat the wastewater before discharging to the City storm drain or sewer system. Pretreatment will require that a clarifier or oil /water separator be installed and maintained on site. 65. If the project involves dewatering, developer /contractor shall contact the LA Regional Water Quality Control Board (RWQCB) to obtain an NPDES Permit for discharge of groundwater from construction dewatering to surface water. For more information Exhibit D Page 17 refer to: http: / /www.waterboards.ca.gov /losangeles/ and search for Order # R4 -2003- 0111. 66. Prior to the issuance of the first building permit, the applicant shall submit a sewer study that shows that the City's sewer system can accommodate the entire development. Developer shall be responsible to upgrade any downstream deficiencies, to the satisfaction of the Water Resources Manager, if calculations show that the project will cause such mains to receive greater demand than can be accommodated. Improvement plans shall be submitted to the Engineering Division. All reports and plans shall also be approved by the Water Resources Engineer. 67. Prior to the issuance of the first building permit, the applicant shall submit a water study that shows that the City's water system can accommodate the entire development for fire flows and all potable needs. Developer shall be responsible to upgrade any water flow /pressure deficiencies, to the satisfaction of the Water Resources Manager, if calculations show that the project will cause such mains to receive greater demand than can be accommodated. Improvement plans shall be submitted to the Engineering Division. All reports and plans shall also be approved by the Water Resources Engineer. 68. Prior to the issuance of the first building permit, the applicant shall submit a hydrology study of all drainage to and from the site to demonstrate adequacy of the existing storm drain system for the entire development. Developer shall be responsible to upgrade any system deficiencies, to the satisfaction of City Engineer, if calculations show that the project will cause such facilities to receive greater demand than can be accommodated. All reports and improvement plans shall be submitted to Engineering Division for review and approval. The study shall be performed by a Registered Civil Engineer licensed in the State of California. 69. All existing sanitary sewer "house connections" to be abandoned, shall be removed and capped at the "Y" connections. 70. The fire services and domestic services 3- inches or greater must be above ground, on the applicant's site, readily accessible for testing. Commercial or residential units are required to either have an individual water meter or a master meter with sub - meters. 71. Developer is required to meet state cross - connection and potable water sanitation guidelines. Refer to requirements and comply with the cross - connections guidelines available at: http:// www.lapublichealth.org /eh /progs /envirp /ehcross.htm. Prior to issuance of a Certificate of Occupancy, a cross - connection inspection shall be completed. 72. All new restaurants and cooking facilities at the site are required to install Gravity Grease Interceptors to pretreat wastewater containing grease. The minimum capacity of the interceptor shall be determined by using table 10 -3 of the 2007 Uniform Plumbing Code, Section 1014.3. All units shall be fitted with a standard final -stage sample box. The 2007 Uniform Plumbing Code guideline in sizing Gravity Grease Exhibit Page 18 Interceptors is intended as a minimum requirement and may be increased at the discretion of PWD, Water Resources Protection Program. 73. Plumbing fixtures that meet the standards for 20% water use reduction specified in the California Green Building Standards Code are required on all new development and remodeling where plumbing is to be added. Urban Water Runoff Mitigation 74. To mitigate storm water and surface runoff from the project site, an Urban Runoff Mitigation Plan shall be required by the PWD pursuant to Municipal Code Chapter 7.10. Prior to submittal of landscape plans for Architectural Review Board approval, the applicant shall contact PWD to determine applicable requirements, such as: • The site must comply with SMMC Chapter 7.10 Urban Runoff Pollution Ordinance for the construction phase and post construction activities; • Non- stormwater runoff, sediment and construction waste from the construction site and parking areas is prohibited from leaving the site; • Any sediments or materials which are tracked off -site must be removed the same day they are tracked off -site; • Excavated soil must be located on the site and soil piles should be covered and otherwise protected so that sediments are not tracked into the street or adjoining properties; • No runoff from the construction site shall be allowed to leave the site; and • Drainage control measures shall be required depending on the extent of grading and topography of the site. Development sites that result in land disturbance of one acre or more are required by the State Water Resources Control Board (SWRCB) to submit a Storm Water Pollution Prevention Plan (SWPPP). Effective September 2, 2011, only individuals who have been certified by the Board as a "Qualified SWPPP Developer" are qualified to develop and /or revise SWPPPs. A copy of the SWPPP shall also be submitted to the PWD. 75. Prior to implementing any temporary construction dewatering or permanent groundwater seepage pumping, a permit is required for the City Water Resources Protection Program (WRPP). Please contact the WRPP for permit requirements as least two weeks in advance of planned dewatering of seepage pumping. They can be reached at (310) 458 -8235. Public Streets & Right -of -Way 76. Prior to issuance of a Certificate of Occupancy for the Project, streetscape for Colorado Avenue, Stanford Street, Pennsylvania Avenue Extension, and New Road frontages, such as AC pavement rehabilitation, replacement of sidewalk, curbs and Exhibit ll Page 19 gutters, installation of street trees, lighting and other appropriate street improvements shall be designed and installed to the satisfaction of the Public Works Department and Public Landscape Division. 77. Unless otherwise approved by the PWD, all sidewalks shall be kept clear and passable during the grading and construction phase of the project. 78. Sidewalks, curbs, gutters, paving and driveways which need replacing or removal as a result of the project as determined by the PWD shall be reconstructed to the satisfaction of the PWD. Design, materials and workmanship shall match the adjacent elements. This is especially true for areas within the City that have architectural concrete, pavers, tree wells, art elements, special landscaping, etc. 79. Street and alley sections adjacent to the development shall be replaced as determined by the PWD. This typically requires full reconstruction of the street or alley in accordance with City of Santa Monica standards for the full adjacent length of the property. 80. Developer shall dedicate the Pennsylvania Avenue Extension Area and all improvements made thereto, which shall provide for new pedestrian sidewalks, bicycle lanes, parkways and vehicular access, all as may be specified by the City; and serve as utility corridors across the Property (the "Pennsylvania Avenue Utility Corridors ") for the placement of public utility facilities that the City determines, from time to time, should be located in the Pennsylvania Avenue Utility Corridors. The Pennsylvania Avenue Utility Corridors in such dedication shall contain the following limitations: • Any dry utilities (including without limitation electricity and telephone or data) shall be located within an area that is no deeper than will leave at least eight feet six inches (8' 6 ") clear height within each level of the subterranean parking garage. Any of clearance within the parking and drive aisle in the parking garage and up to twenty -five (25) feet wide, in a location to be reasonably determined by Developer that will allow the minimum height clearances to be maintained in the parking garage and that will avoid the mechanical and other system facilities installed by Developer in the subterranean parking structure that serve the Project. 81. Developer shall dedicate the New Road Area and all improvements made thereto, which shall provide for new pedestrian sidewalks, bicycle lanes, parkways and vehicular' access, all as may be specified by the City; and serve as utility corridors across the Property (the "New Road Utility Corridors ") for the placement of public utility facilities that the City determines, from time to time, should be located in the New Road Utility Corridors. The New Road Utility Corridors in such dedication shall contain the following limitations: Any dry utilities (including without limitation electricity and telephone or data) shall be located within an area that is no deeper than will leave at least eight feet six inches (8' 6 ") clear height within each level of the subterranean Exhibit D Page 20 parking garage. Any of clearance within the parking and drive aisle in the parking garage and up to eight feet (8' 0 ") wide, in a location to be reasonably determined by Developer that will allow the minimum height clearances to be maintained in the parking garage and that will avoid the mechanical and other system facilities installed by Developer in the subterranean parking structure that serve the Project. Utilities 82. Prior to issuance of a Certificate of Occupancy for the Project, provide new street - pedestrian lighting with a multiple circuit system along the new street right -of -way and within the development site in compliance with the PWD Standards and requirements. New street - pedestrian light poles, fixtures and appurtenances to meet City standards and requirements. 83. Make arrangements with utility companies and pay for undergrounding of all overhead utilities within and along the development frontages. Existing and proposed overhead utilities need to be relocated underground. 84. Location of Southern California Edison electrical transformer and switch equipment /structures must be clearly shown of the development site plan and other appropriate plans within the project limits. The SCE structures serving the proposed development shall not be located in the public right -of -way. Resource Recovery and Recycling 85. Development plans must show the refuse and recycling (RR) area dimensions to demonstrate adequate and easily accessible area. If the RR area is completely enclosed, then lighting, ventilation and floor drain connected to sewer will be required. Section 9.04.10.02.151 of the SMMC has dimensional requirements for various sizes and types of projects. Developments that place the RR area in subterranean garages must also provide a bin staging area on their property for the bins to be placed for collection. 86. Contact the PWD — Resource Recovery and Recycling (RRR) Division to obtain dimensions of the refuse recycling enclosure. 87. Prior to issuance of a Building Permit, submit a waste management plan, a map of the enclosure and staging area with dimensions and a recycling plan to the RRR Division for its approval. The State of California AB 341 requires any multi- family building housing 5 units or more to have a recycling program in place for its tenants. All commercial businesses generating 4 cubic yards of trash per week must also have a recycling program in place for its employees and clients /customers. Show compliance with these requirements on the building plans. Visit the RRR website or contact the RRR Division for requirements of the Waste Management Plan and to obtain the minimum dimensions of the refuse recycling enclosure. The recycling plan shall include: Exhibit Page 21 • List of materials such as white paper, computer paper, metal cans, and glass to be recycled; • Location of recycling bins; • Designated recycling coordinator; • Nature and extent of internal and external pick -up service; • Pick -up schedule; and • Plan to inform tenants/ occupants of service. Exhibit D Page 22 Construction Period Mitigation 88. A construction period mitigation plan shall be prepared by the applicant for approval by the PWD prior to issuance of a building permit. The approved mitigation plan shall be posted on the site for the duration of the project construction and shall be produced upon request. As applicable, this plan shall: • Specify the names, addresses, telephone numbers and business license numbers of all contractors and subcontractors as well as the developer and architect; • Describe how demolition of any existing structures is to be accomplished; • Indicate where any cranes are to be located for erection/construction; • Describe how much of the public street, alleyway, or sidewalk is proposed to be used in conjunction with construction; • Set forth the extent and nature of any pile- driving operations; • Describe the length and number of any tiebacks which must extend under the public right -of -way and other private properties; • Specify the nature and extent of any dewatering and its effect on any adjacent buildings; • Describe anticipated construction - related truck routes, number of truck trips, hours of hauling and parking location; • Specify the nature and extent of any helicopter hauling; • State whether any construction activity beyond normally permitted hours is proposed; • Describe any proposed construction noise mitigation measures, including measures to limit the duration of idling construction trucks; • Describe construction- period security measures including any fencing, lighting, and security personnel; • Provide a grading and drainage plan; • Provide a construction - period parking plan which shall minimize use of public streets for parking; • List a designated on -site construction manager; • Provide a construction materials recycling plan which seeks to maximize the reuse /recycling of construction waste; • Provide a plan regarding use of recycled and low- environmental- impact materials in building construction; and • Provide a construction period urban runoff control plan. Exhibit D Page 23 Air Quality 89. Dust generated by the development activities shall be kept to a minimum with a goal of retaining dust on the site through implementation of the following measures recommended by the SCAQMD Rule 43 Handbook: During clearing, grading, earth moving, excavation, or transportation of cut or fill materials, water trucks or sprinkler systems are to be used to the extent necessary to prevent dust from leaving the site and to create a crust after each day's activities cease. Vehicles hauling dirt or other construction debris from the site shall cover any open load with a tarpaulin or other secure covering to minimize dust emissions. Immediately after commencing dirt removal from the site, the general contractor shall provide the City with written certification that all trucks leaving the site are covered in accordance with this condition of approval. During clearing, grading, earth moving, excavation, or transportation of cut or fill materials, streets and sidewalks within 150 feet of the site perimeter shall be swept and cleaned a minimum of twice weekly or as frequently as required by the PWD. During construction, water trucks or sprinkler systems shall be used to keep all areas of vehicle movement damp enough to prevent dust from leaving the site. At a minimum, this would include wetting down such areas in the later morning and after work is completed for the day and whenever wind exceeds 15 miles per hour. Soil stockpiled for more than two days shall be covered, kept moist, or treated with soil binders to prevent dust generation. 90. Construction equipment used on the site shall meet the following conditions in order to minimize NO, and ROC emissions: Diesel - powered equipment such as booster pumps or generators should be replaced by electric equipment to the extent feasible; and The operation of heavy -duty construction equipment shall be limited to no more than 5 pieces of equipment at one time. Noise Attenuation 91. All diesel equipment shall be operated with closed engine doors and shall be equipped with factory- recommended mufflers. 92. Electrical power shall be used to run air compressors and similar power tools. Exhibit D Page 24 93. For all noise - generating activity on the project site associated with the installation of new facilities, additional noise attenuation techniques shall be employed to reduce noise levels to City of Santa Monica noise standards. Such techniques may include, but are not limited to, the use of sound blankets on noise generating equipment and the construction of temporary sound barriers between construction sites and nearby sensitive receptors. Miscellaneous 94. For temporary excavation and shoring that includes tiebacks into the public right -of- way, a Tieback Agreement, prepared by the City Attorney, will be required. Exhibit D Page 25 FIRE General Requirements The following comments are to be included on plans if applicable. Requirements are based on the California Fire Code (CFC), the Santa Monica Municipal Code (SMMC) and the California Building Code (CBC). To the extent that there is a conflict between these requirements and the site plan included in the Project Plans, the site plan shall supersede these requirements. California Fire Code/ Santa Monica Fire Department Requirements A fire apparatus access road shall be provided to within 150 feet of all exterior walls of the first floor of the building. The route of the fire apparatus access road shall be approved by the fire department. The 150 feet is measured by means of an unobstructed route around the exterior of the building. Notwithstanding the foregoing, Building C of the Project shall not be subject to this condition; provided that Building C has sprinklers installed on all floors in accordance with applicable City building codes. 2. Apparatus access roads shall have a minimum unobstructed width of 20 feet. A minimum vertical clearance of 13 feet 6 inches shall be provided for the apparatus access roads. 3. Dead -end fire apparatus access roads in excess of 150 feet in length shall be provided with an approved means for turning around the apparatus. 4. A "Knox" key storage box shall be provided for ALL new construction. For buildings, other than high -rise, a minimum of 3 complete sets of keys shall be provided. Keys shall be provided for all exterior entry doors, fire protection equipment control equipment rooms, mechanical and electrical rooms, elevator controls and equipment spaces, etc. For high -rise buildings, 6 complete sets are required. 5. Santa Monica Municipal Code Chapter 8 Section 8.44.050 requires an approved automatic fire sprinkler system in ALL new construction and certain remodels or additions. Any building that does not have a designated occupant and use at the time fire sprinkler plans are submitted for approval, the system shall be designed and installed to deliver a minimum density of not less than that required for ordinary hazard, Group 2, with a minimum design area of not less than three thousand square feet. Plans and specifications for fire sprinkler systems shall be submitted and approved prior to system installation. 6. Buildings four or more stories in height shall be provided with not less than one standpipe during construction. Exhibit D Page 26 The standpipe(s) shall be installed before the progress of construction is more than 35- feet above grade. Two - and - one - half -inch valve hose connections shall be provided at approved, accessible locations adjacent to useable stairs. Temporary standpipes shall be capable of delivering a minimum demand of 500 gpm at 100 -psi residual pressure. Pumping equipment shall be capable of providing the required pressure and volume. 8. Provide Multipurpose Dry Chemical type fire extinguishers with a minimum rating of 2A -1 OB:C. Extinguishers shall be located on every floor or level. Maximum travel distance from any point in space or building shall not exceed 75 feet. Extinguishers shall be mounted on wall or installed in cabinet no higher than 4 ft. above finished floor and plainly visible and readily accessible or signage shall be provided. 9. An automatic fire extinguishing system complying with UL 300 shall be provided to protect commercial -type cooking or heating equipment that produces grease -laden vapors. A separate plan submittal is required for the installation of the system and shall be in accordance with UFC Article 10, NFPA 17A and NFPA 96. Provide a Class "K" type portable fire extinguisher within 30 feet the kitchen appliances emitting grease -laden vapors. 10. Every building and /or business suite is required to post address numbers that are visible from the street and alley. Address numbers shall be a minimum of six (6) inches in height and contrast with their background. Suite or room numbers shall be a minimum of four (4) inches in height and contrast with their background. Santa Monica Municipal Code Chapter 8 Section 8.48.130 (1) (1) 11. When more than one exit is required they shall be arranged so that it is possible to go in either direction to a separate exit, except dead -ends not exceeding 20 feet, and 50 feet in fully sprinklered buildings. 12. Exit and directional signs shall be installed at every required exit doorway, intersection of corridors, exit stairways and at other such locations and intervals as necessary to clearly indicate the direction of egress. This occupancy /use requires the installation of approved floor level exit pathway marking. Exit doors shall be openable from the inside without the use of a key, special effort or knowledge. 13. Show ALL door hardware intended for installation on Exit doors. 14. In buildings two stories or more in height an approved floor plan providing emergency procedure information shall be posted at the entrance to each stairway, in every elevator lobby, and immediately inside all entrances to the building. The information shall be posted so that it describes the represented floor and can be easily seen upon entering the floor level or the building. Required information shall meet the minimum standards established in the Santa Monica Fire Department, Fire Prevention Division, and information sheet entitled "Evacuation Floor Plan Signs." (California Code of Regulations Title 19 Section 3.09) 15. Stairway Identification shall be in compliance with CBC 1022.8 Exhibit D Page 27 16. Floor -level exit signs are required in Group A, E, I, R -1, R -2 and R -4 occupancies. 17. In buildings two stories in height at least one elevator shall conform to the California Building Code Chapter 30 Section 3003.5a for General Stretcher Requirements for medical emergency use. a. The elevator entrance shall not be less than 42 inches wide by 72 inches high. b. The elevator car shall have a minimum clear distance between walls excluding return panels of not less than 80 inches by 54 inches. C. Medical emergency elevators shall be identified by the international symbol (star of life) for emergency elevator use. The symbol shall be not less than 3- inches in size. 18. Storage, dispensing or use of any flammable or combustible liquids, flammable compressed gases or other hazardous materials shall comply with the Uniform Fire Code. The Santa Monica Fire Department prior to any materials being stored or used on site shall approve the storage and use of any hazardous materials. Complete and submit a "Consolidated Permit Application Package." Copies may be obtained by calling (310) 458 -8915. 19. Alarm- initiating devices, alarm - notification devices and other fire alarm system components shall be designed and installed in accordance with the appropriate standards of Chapter 35 of the Building Code, and the National Fire Alarm Code NFPA 72. The fire alarm system shall include visual notification appliances for warning the hearing impaired. Approved visual appliances shall be installed in ALL rooms except private (individual) offices, closets, etc 20. An approved fire alarm system shall be installed as follows: 21. Group A Occupancies with an occupant load of 1,000 or more shall be provided with a manual fire alarm system and an approved prerecorded message announcement using an approved voice communication system. Emergency power shall be provided for the voice communication system. 22. Group E Occupancies having occupant loads of 50 or more shall be provided with an approved manual fire alarm system. 23. Group R -1, R -2 Apartment houses containing 16 or more dwelling units, in building three or more stories in height R -2.1 and R -4 Occupancies shall be provided with a manual alariri system. Smoke detectors shall be provided in all common areas and interior corridors of required exits. Recreational, laundry, furnace rooms and similar areas shall be provided with heat detectors. 24. Plans and specifications for fire alarm systems shall be submitted and approved prior to system installation Exhibit D Page 28 Santa Monica Fire Department - Fire Prevention Policy Number 5 -1 Subject: Fire Apparatus Access Road Requirements Scope: This policy identifies the minimum standards for apparatus access roads required by California Fire Code, Section 503. Application 25. Fire apparatus access roads shall comply with the following minimum standards: a. The minimum clear width shall be not less than 20 feet. No parking, stopping or standing of vehicles is permitted in this clear width. b. When fire hydrants or fire department connections to fire sprinkler systems are located on fire apparatus access roads the minimum width shall be 26 feet. This additional width shall extend for 20 feet on each side of the centerline of the fire hydrant or fire department connection. C. The minimum vertical clearance shall be 13 feet, 6 inches. d. The minimum turn radius for all access road turns shall be not less than 39 feet for the inside radius and 45 feet for the outside radius. e. Dead -end access roads in excess of 150 feet in length shall be provided with either a 96 feet diameter "cul -de- sac," 60 foot "Y" or 120 -foot "hammerhead" to allow the apparatus to turn. f. The surface shall be designed and maintained to support the imposed loads of at least 75,000 -pound and shall be "all- weather." An "all- weather" surface is asphalt, concrete or other approved driving surface capable of supporting the load. 26. Gates installed on fire apparatus access roads shall comply with the following: a. The width of any gate installed on a fire apparatus access road shall be a minimum of 20 feet. b. Gates may be of the swinging or sliding type. C. Gates shall be constructed of materials that will allow for manual operation by one person. d. All gate components shall be maintained in an operative condition at all times and shall be repaired or replaced when defective. e. Electric gates shall be equipped with a means of opening the gate by fire department personnel for emergency access. The Fire Prevention Division shall approve emergency opening devices. f. Manual opening gates may be locked with a padlock, as long it is accessible to be opened by means of forcible entry tools. g. The Fire Prevention Division shall approve locking device specification. Exhibit D Page 29 )520, Q':�TYP* —s 26' 26' R ' 20'—T <--20' 26' 96' DIAMETER 60' `Y" MINIMUM CLEARANCE CUL -DE -SAC AROUND A FIRE HYDRANT 28' R TYP' 20'—j 26' 120' HAMMERHEAD 28' R TYR, rt 70' 20'—T 20' ACCEPTABLE ALTERNATIVE TO120'HAMMERHEAD 27. Fire apparatus access roads shall be marked with permanent NO PARKING — FIRE LANE CVC SECTION 22500.1. Signs shall have a minimum dimension of 12 inches wide and 18 inches high having red letters on a white reflective background. a. Fire apparatus access roads signs and placement shall comply with the following: i. Fire Apparatus access roads 20 to 26 feet wide must be posted on both sides as a fire lane. ii. Fire Apparatus access roads 26 to 32 feet wide must be posted on one side as a fire lane. 28. Buildings or facilities exceeding 30 feet in height or more than 3 stories in height shall have at least 2 fire apparatus access roads for each structure. 29. Fire apparatus access roads for commercial and industrial development shall comply with the following: a. Buildings or facilities exceeding 30 feet in height or more than 3 stories in height shall have at least means of fire apparatus access for each structure. b. Buildings or facilities having a gross floor area of more than 62,000 square feet shall be provided with 2 fire apparatus access roads. Exhibit D Page 30 C. When two access roads are required, they shall be placed a distance apart equal to not less than one half of the length of the maximum overall diagonal dimension of the property or area to be accessed measured in a straight line between accesses. 30. Aerial apparatus access roads shall comply with the following: a. Buildings or portions of buildings or facilities exceeding 30 feet in height from the lowest point of Fire Department access shall be provided shall be provided with approved apparatus access roads capable of accommodating aerial apparatus. b. Apparatus access roads shall have a minimum width of 26 feet in the immediate vicinity of any building or portion of a building more than 30 feet in height. C. At least one of the required access roads meeting this condition shall be located within a minimum of 15 feet and maximum of 30 feet from the building and shall be a positioned parallel to one entire side of the building. Exhibit D Page 31 31. California Buildings Code / Santa Monica Fire Department Requirements Occupancy Classification and Division • If a change in occupancy or use, identify the existing and all proposed new occupancy classifications and uses • Assembly (A -1, A -2, A -3), Business (B), Mercantile (M), Residential (R), etc. • Include all accessory uses Building Height • Height in feet (SMMC defines a High -Rise as any structure greater than 55 feet.) • Number of stories • Detail increase in allowable height • Type I (I1 -FR.) buildings housing Group B office or Group R, Division 1 Occupancies each having floors used for human occupancy located more than 55 feet above the lowest level of fire department vehicle access sball comply with CBC Section 403. • Automatic sprinkler system. • Smoke - detection systems. • Smoke control system conforming to Chapter 9 Section 909. • Fire alarm and communication systems. i. Emergency voice alarm signaling system ii. Fire department communication system. • Central control station. (96 square feet minimum with a minimum dimension of 8' ft) • {omitted) • Elevators. • Standby power and light and emergency systems. • Exits • Seismic consideration. Exhibit D Page 32 Total Floor Area of Building or Project • Basic Allowable Floor Area • Floor Area for each room or area • Detail allowable area increase calculations Corridor Construction • Type of Construction • Detail any and all code exceptions being used Occupant Load Calculations • Occupancy Classification for each room or area. • Occupant Load Calculation for each room or area based on use or occupancy • Total Proposed Occupant Load _ Means of Egress • Exit width calculations • Exit path of travel • Exit Signage and Pathway Illumination (low level exit signage) Atria - Atria shall comply with CBC Section 404 as follows: • Atria shall not be permitted in buildings containing Group H Occupancies. • The entire building shall be sprinklered. • A mechanically operated smoke - control system meeting the requirements of Section 909 and 909.9 shall be installed. • Smoke detectors shall be installed in accordance with the Fire Code. • Except for open exit balconies within the atrium, the atrium shall be separated from adjacent spaces by one -hour fire- resistive construction. See exceptions to Section 404.6. • When a required exit enters the atrium space, the travel distance from the doorway of the tenant space to an enclosed stairway, horizontal exit, exterior door or exit passageway shall not exceed 200 feet. • In other than jails, prisons and reformatories, sleeping rooms of Group I Occupancies shall not have required exits through the atrium. • Standby power shall be provided for the atrium and tenant space smoke - control system. Sections 404.7 and 909.11. Exhibit D Page 33 • The interior finish for walls and ceilings of the atrium and all unseparated tenant spaces shall be Class I. Section 404.8. Atriums of a height greater than 20 feet, measured from the ceiling sprinklers, shall only contain furnishings and decorative materials with potential heat of combustion less than 9,000 Btu's per pound. All furnishings to comply with California Bureau of Home Furnishings, Technical Bulletin 133, "Flammability Test for Seating Furniture in Public Occupancies." All furnishings in public areas shall comply with California Bureau of Home Furnishings, Technical Bulletin 133, and "Flammability Test for Seating Furniture in Public Occupancies." Fire — Los Angeles County 32. Fire Flow Requirements I. INTRODUCTION A. Pur ose: To provide Department standards for fire flow, hydrant spacing and specifications. B. Scone: Informational to the general public and instructional to all individuals, companies, or corporations involved in the subdivision of land, construction of buildings, or alterations and /or installation of fire protection water systems and hydrants. C. Author: The Deputy Chief of the Prevention Services Bureau through the Assistant Fire Chief (Fire Marshal) of the Fire Prevention Division is responsible for the origin and maintenance of this regulation. D. Definitions: GPM — gallons per minute 2. psi — pounds per square inch 3. Detached condominiums — single detached dwelling units on land owned in common 4. Multiple family dwellings — three or more dwelling units attached Exhibit D Page 34 II. RESPONSIBILITY A. Land Development Unit The Department's Land Development Unit shall review all subdivisions of land and apply fire flow and hydrant spacing requirements in accordance with this regulation and the present zoning of the subdivision or allowed land use as approved by the County's Regional Planning Commission or city planning department. B. Fire Prevention Engineering Section III. POLICY The Department's Fire Prevention Engineering Section shall review building plans and apply fire flow and hydrant spacing requirements in accordance with this regulation. The procedures, standards, and policies contained herein are provided to ensure the adequacy of, and access to, fire protection water and shall be enforced by all Department personnel. (remainder ofpage is blank) Exhibit D Page 35 IV. PROCEDURES A. Land development: fire flow, duration of flow, and hydrant spacing The following requirements apply to land development issues such as: tract maps, conditional use permits, zone changes, lot line adjustments, planned unit developments, etc. 1. Residential Fire Zones 3 Very High Fire Hazard Severity Zone (VHFHSZ) Duration Public Hvdrant Fire Flow of Flow Spacing a. Single family dwelling 1,250 GPM 2 hrs. 600 ft. and detached condominiums (1 —4 Units) (Under 5,000 square feet) b Detached condominium 1,500 GPM 2 hrs. 300 ft. (5 or more units) (Under 5,000 square feet) C. Two family dwellings 1,500 GPM 2 hrs. 600 ft. (Duplexes) NOTE: FOR SINGLE FAMILY DWELLINGS OVER 5,000 SQUARE FEET. SEE, TABLE I FOR FIRE FLOW REQUIREMENTS PER BUILDING SIZE. 1. Multiple family dwellings, hotels, high rise, commercial, industrial, etc. a. Due to the undetermined building designs for new land development projects (undeveloped land), the required fire flow shall be: 5,000 GPM 5 hrs. 300 ft. NOTE: REDUCTION IN FIRE FLOW IN ACCORDANCE WITH TABLE 1. Exhibit D Page 36 b. Land development projects consisting of lots having existing structures shall be in compliance with Table 1 (fire flow per building size). This standard applies to multiple family dwellings, hotels, high rise, commercial, industrial, etc. NOTE: FIRE FLOWS PRECEDING ARE MEASURED AT 20 POUNDS PER SQUARE INCH RESIDUAL PRESSURE. B. Building plans The Department's Fire Prevention Engineering Section shall review building plans and apply fire flow requirements and hydrant spacing in accordance with the following: 1. Residential Building Occupancy Classification a. Single family dwellings - Fire Zone 3 (Less than 5,000 square feet) Duration Public Hydrant Fire Flow of Flow S acin On a lot of one acre or more 750 GPM 2 hrs. 600 ft. On a lot less than one acre 1,250 GPM 2 hrs 600 ft. b. Single family dwellings — VHFHSZ (Less than 5,000 square feet) On a lot of one acre or more 1,000 GPM 2 hrs. 600 ft. On a lot less than one acre 1,250 GPM 2 hrs 600 ft. NOTE: FOR SINGLE FAMILY DWELLINGS GREATER THAN 5,000 SQUARE FEET IN AREA SEE TABLE Exhibit D Page 37 Duration Public Hydrant Fire Flow of Flow Spacine c. Two family dwellings — VHFHSZ (Less than 5,000 square feet) Duplexes 1. Mobilehome Park a. Recreation Buildings b. Mobilehome Park 1,500 GPM 2 hrs 600 ft. Refer to Table 1 for fire flow according to building size. 1,250 GPM 2 hrs 600 ft. 2. Multiple residential, apartments, single family residences (greater than 5,000 square feet), private schools, hotels, high rise, commercial, industrial, etc. (R -1, E, B, A, I, H, F, M, S) (see Table 1). C. Public fire hydrant requirements Fire hydrants shall be required at intersections and along access ways as spacing requirements dictate 2. Spacing a. Cul -de -sac When cul -de -sac depth exceeds 450' (residential) or 200' (commercial), hydrants shall be required at mid - block. Additional hydrants will be required if hydrant spacing exceeds specified distances. b. Single family dwellings Fire hydrant spacing of 600 feet NOTE: The following guidelines shall be used in meeting single family dwellings hydrant spacing requirements: (1) Urban properties (more than one unit per acre): No portion of lot frontage should be more than 450' via vehicular access from a public hydrant. Exhibit D Page 38 (2) Non -Urban Properties (less than one unit per acre): No portion of a structure should be placed on a lot where it exceeds 750' via vehicular access from a properly spaced public hydrant that meets the required fire flow. c. All occupancies Other than single family dwellings, such as commercial, industrial, multi- family dwellings, private schools, institutions, detached condominiums (five or more units), etc. Fire hydrant spacing shall be 300 feet. NOTE: The following guidelines shall be used in meeting the hydrant spacing requirements. (1) No portion of lot frontage shall be more than 200 feet via vehicular access from a public hydrant. (2) No portion of a building should exceed 400 feet via vehicular access from a properly spaced public hydrant. d. Supplemental fire protection When a structure cannot meet the required public hydrant spacing distances, supplemental fire protection shall be required. NOTE: Supplemental fire protection is not limited to the installation of on -site fire hydrants; it may include automatic extinguishing systems. Hydrant location requirements - both sides of a street Hydrants shall be required on both sides of the street whenever: a. Streets having raised median center dividers that make access to hydrants difficult, cause time delay, and /or creates undue hazard. b. For situations other than those listed in "a" above, the Department's inspector's judgment shall be used. The following items shall be considered when determining hydrant locations: (1) Excessive traffic loads, major arterial route, in which traffic would be difficult to detour. (2) Lack of adjacent parallel public streets in which traffic could be redirected (e.g., Pacific Coast Highway). Exhibit D Page 39 (3) Past practices in the area. (4) Possibility of future development in the area. (5) Type of development (i.e., flag -lot units, large apartment or condo complex, etc.). (6) Accessibility to existing hydrants (7) Possibility of the existing street having a raised median center divider in the near future. D. On -Site Hydrant Requirements When any portion of a proposed structure exceeds (via vehicular access) the allowable distances from a public hydrant and on -site hydrants are required, the following spacing requirements shall be met: a. Spacing distance between on -site hydrants shall be 300 to 600 feet. (1) Design features shall assist in allowing distance modifications. b. Factors considered when allowing distance modifications. (1) Only sprinklered buildings qualify for the maximum spacing of 600 feet. (2) For non - sprinklered buildings, consideration should be given to fire protection, access doors, outside storage, etc. Distance between hydrants should not exceed 400 feet. 2. Fire flow a. All on -site fire hydrants shall flow a minimum of 1,250 gallons per minute at 20 psi for a duration of two hours. If more than one on- site fire hydrant is required, the on -site fire flow shall be at least 2,500 gallons per minute at 20 psi, flowing from two hydrants simultaneously. On site flow may be greater depending upon the size of the structure and the distance from public hydrants. NOTE: ONE OF THE TWO HYDRANTS TESTED SHALL BE THE FARTHEST FROM THE PUBLIC WATER SOURCE. Exhibit D Page 40 3. Distance from structures All on -site hydrants shall be installed a minimum of 25 feet from a structure or protected by a two -hour firewall. 4. Shut -off valves All on -site hydrants shall be equipped with a shut -off (gate) valve, which shall be located as follows: a. Minimum distance to the hydrant 10 feet. b. Maximum distance from the hydrant 25 feet 5. Inspection of new installations All new on -site hydrants and underground installations are subject to inspection of the following items by a representative of the Department: a. Piping materials and the bracing and support thereof. b. A hydrostatic test of 200 psi for two hours. c. Adequate flushing of the installation. d. Flow test to satisfy required fire flow. (1) Hydrants shall be painted with two coats of red primer and one coat of red paint, with the exception of the stem and threads, prior to flow test and acceptance of the system. 6. Maintenance It shall be the responsibility of the property management company, the homeowners association, or the property owner to maintain on -site hydrants. a. Hydrants shall be painted with two coats of red primer and one coat of red, with the exception of the stem and threads, prior to flow test and acceptance of the system. b. No barricades, walls, fences, landscaping, etc., shall be installed or planted within three feet of a fire hydrant. E. Public Hydrant Flow Procedure Exhibit D Page 41 The minimum acceptable flow from any existing public hydrant shall be 1,000 GPM unless the required fire flow is less. Hydrants used to satisfy fire flow requirements will be determined by the following items: Only hydrants that meet spacing requirements are acceptable for meeting fire flow requirements. 2. In order to meet the required fire flow: a. Flow closest hydrant and calculate to determine flow at 20 pounds per square inch residual pressure. If the calculated flow does not meet the fire flow requirement, the next closest hydrant shall be flowed simultaneously with the first hydrant, providing it meets the spacing requirement, etc. b. If more than one hydrant is to be flowed in order to meet the required fire flow, the number of hydrants shall be flowed as follows: One hydrant 1,250 GPM and below Two hydrants 1,251— 3,500 GPM flowing simultaneously Three hydrants 3,501— 5,000 GPM flowing simultaneously F. Hydrant Upgrade Policy Existing single outlet 2 1/2" inch hydrants shall be upgraded to a double outlet 6" x 4" x 2 1/2" hydrant when the required fire flow exceeds 1,250GPM. 2. An upgrade of the fire hydrant will not be required if the required fire flow is between the minimum requirement of 750 gallons per minute, up to and including 1,250 gallons per minute, and the existing public water system will provide the required fire flow through an existing wharf fire hydrant. 3. All new required fire hydrant installations shall be approved 6" x 4" x 2 1/2" fire hydrants. 4. When water main improvements are required to meet GPM flow, and the existing water main has single outlet 2 1/2" fire hydrant(s), then a hydrant(s) upgrade will be required. This upgrade shall apply regardless of flow requirements. 5. The owner- developer shall be responsible for making the necessary arrangements with the local water purveyor for the installation of all public facilities. Exhibit D Page 42 6. Approved fire hydrant barricades shall be installed if curbs are not provided (see Figures 1, 2, and 3 following on pages 11 and 12). G. Hydrant Specifications All required public and on -site fire hydrants shall be installed to the following specifications prior to flow test and acceptance of the system. Hydrants shall be: a. Installed so that the center line of the lowest outlet is between 14 and 24 inches above finished grade b. Installed so that the front of the riser is between 12 and 24 inches behind the curb face C. Installed with outlets facing the curb at a 45- degree angle to the curb line if there are double outlet hydrants d. Similar to the type of construction which conforms to current A.W.W.A. Standards e. Provided with three -foot unobstructed clearance on all sides. f Provided with approved plastic caps g. Painted with two coats of red primer and one coat of traffic signal yellow for public hydrants and one coat of red for on -site hydrants, with the exception of the stems and threads 2. Underground shut -off valves are to be located: a. A minimum distance of 10 feet from the hydrant b. A maximum distance of 25 feet from the hydrant Exception: Location can be less than 10 feet when the water main is already installed and the 10 -foot minimum distance cannot be satisfied. 3. All new water mains, laterals, gate valves, buries, and riser shall be a minimum of six inches inside diameter. Exhibit D Page 43 4. When sidewalks are contiguous with a curb and are five feet wide or less, fire hydrants shall be placed immediately behind the sidewalk. Under no circumstances shall hydrants be more than six feet from a curb line. The owner- developer shall be responsible for making the necessary arrangements with the local water purveyor for the installation of all public facilities. 6. Approved fire hydrant barricades shall be installed if curbs are not provided (see Figures 1, 2, and 3 following on pages I 1 and 12). Exhibit D Page 44 Barricade /Clearance Details CONCRETE CAP b'6ARRICADE POST CANCRET€ F�LLE4 GIN. W d' O)A SCHEDULE 40 2' STEEL SEE NOTE kt 4 MN, W Figure 1 I PLAN FIRE HYDRANT BARRICADES (TYPICAL) Figure 2 Exhibit D Page 45 Notes: Figure 3 Constructed of steel not less than four inches in diameter, six inches if heavy truck traffic is anticipated, schedule 40 steel and concrete filled. 2. Posts shall be set not less than three feet deep in a concrete footing of not less than 15 inches in diameter, with the top of the posts not less than three feet above ground and not less than three feet from the hydrant 3. Posts, fences, vehicles, growth, trash storage and other materials or things shall not be placed or kept near fire hydrants in a manner that would prevent fire hydrants from being immediately discernable. 4. If hydrant is to be barricaded, no barricade shall be constructed in front of the hydrant outlets (Figure 2, shaded area). 5. The exact location of barricades may be changed by the field inspector during a field inspection. 6. The steel pipe above ground shall be painted a minimum of two field coats of primer. 7. Two finish coats of "traffic signal yellow" shall be used for fire hydrant barricades. 8. Figure 3 shows hydrant hook up during fireground operations. Notice apparatus (hydra- assist - valve) connected to hydrant and the required area. Figure 3 shows the importance of not constructing barricades or other obstructions in front of hydrant outlets. Exhibit D Page 46 H. Private fire protection systems for rural commercial and industrial development Where the standards of this regulation cannot be met for industrial and commercial developments in rural areas, alternate proposals which meet NFPA Standard 1142 may be submitted to the Fire Marshal for review. Such proposals shall also be subject to the following: The structure is beyond 3,000 feet of any existing, adequately -sized water system. a. Structures within 3,000 feet of an existing, adequately -sized water system, but beyond a water purveyor service area, will be reviewed on an individual basis. 2. The structure is in an area designated by the County of Los Angeles' General Plan as rural non - urban. Blue reflective hydrant markers replacement policy 1. Purpose: To provide information regarding the replacement of blue reflective hydrant markers, following street construction or repair work. a. Fire station personnel shall inform Department of Public Works Road Construction Inspectors of the importance of the blue reflective hydrant markers, and encourage them to enforce their Department permit requirement, that streets and roads be returned to their original condition, following construction or repair work. b. When street construction or repair work occurs within this Department's jurisdiction, the nearest Department of Public Works Permit Office shall be contacted. The location can be found by searching for the jurisdiction office in the "County of Los Angeles Telephone Directory" under "Department of Public Works Road Maintenance Division." The importance of the blue reflective hydrant markers should be explained, and the requirement encouraged that the street be returned to its original condition, by replacing the hydrant markers. Exhibit D Page 47 TABLE 1 * BUILDING SIZE (First floor area) Fire Flow *(1) (2) Duration Hydrant Spacing Under 3,000 sq. ft. 1,000 GPM 2 hrs. 300 ft. 3,000 to 4,999 sq. ft. 1,250 GPM 2 hrs. 300 ft. 5,000 to 7,999 sq. ft. 1,500 GPM 2 hrs. 300 ft. 8,000 to 9,999 sq. ft. 2,000 GPM 2 hrs. 300 ft. 10,000 to 14,999 sq. ft. 2,500 GPM 2 brs. 300 ft. 15,000 to 19,999 sq. ft. 3,000 GPM 3 hrs. 300 ft. 20,000 to 24,999 sq. ft. 3,500 GPM 3 hrs. 300 ft. 25,000 to 29,999 sq. ft. 4,000 GPM 4 hrs. 300 ft. 30,000 to 34,999 sq. ft. 4,500 GPM 4 hrs. 300 ft. 35,000 or more sq. ft. 5,000 GPM 5 hrs. 300 ft. *See applicable footnotes below: (FIRE FLOWS MEASURED AT 20 POUNDS PER SQUARE INCH RESIDUAL PRESSURE) (1) Conditions requiring additional fire flow. a. Each story above ground level - add 500 GPM per story. b. Any exposure within 50 feet - add a total of 500 GPM. C. Any high -rise building (as determined by the jurisdictional building code) the fire flow shall be a minimum of 3,500 GPM for 3 hours at 20 psi. d. Any flow may be increased up to 1,000 GPM for a hazardous occupancy. (2) Reductions in fire flow shall be cumulative for type of construction and a fully sprinklered building. The following allowances and /or additions may be made to standard fire flow requirements: Exhibit D Page 48 a. A 25% reduction shall be granted for the following types of construction: Type I -F.R, Type II -F.R., Type II one -hour, Type II -N, Type III one -hour, Type III -N, Type IV, Type IV one hour, and Type V one -hour. This reduction shall be automatic and credited on all projects using these types of construction. Credit will not be given for Type V -N structures (to a minimum of 2,000 GPM available fire flow). b. A 25% reduction shall be granted for fully sprinklered buildings (to a minimum of 2,000 GPM available fire flow). C. When determining required fire flows for structures that total 70,000 square feet or greater, such flows shall not be reduced below 3,500 GPM at 20 psi for three hours. Exhibit D Page 49 EXHIBIT "E" SMMC ARTICLE 9 (PLANNING AND ZONING) On file with the City Clerk Exhibit E Page I EXHIBIT "F -1" LOCAL HIRING PROGRAM FOR CONSTRUCTION Local Hiring Policy For Construction. Developer shall implement a local hiring policy (the "Local Hiring Policy ") for construction of the Project, consistent with the following guidelines: Purpose. The purpose of the Local Hiring Policy is to facilitate the employment by Developer and its contractors at the Project of residents of the City of Santa Monica (the "Targeted Job Applicants "), and in particular, those residents who are "Low- Income Individuals" (defined below). 2. Definitions. a. "Contract" means a contract or other agreement for the providing of any combination of labor, materials, supplies, and equipment to the construction of the Project that will result in On -Site Jobs, directly or indirectly, either pursuant to the terms of such contract or other agreement or through one or more subcontracts. b. "Contractor" means a prime contractor, a sub - contractor, or any other entity that enters into a Contract with Developer for any portion or component of the work necessary to construct the Project (excluding architectural, design and other "soft" components of the construction of the Project). C. "Low Income Individual' means a resident of the City of Santa Monica whose household income is no greater than 80% of the Median Income. d. "Median Income" means the median income for the Los Angeles Metropolitan Statistical Area, as published from time to time by the City in connection with its Affordable Housing Production Program pursuant to SMMC Section 9.56. e. "On -Site Jobs" means all jobs by a Contractor under a Contract for which at least fifty percent (50 %) of the work hour for such job requires the employee to beat the Project site, regardless of whether such job is in the nature of an employee or an independent contractor. 3. Priority for Targeted Job Applicants. Subject to Section 6 below in this Exhibit "F -1," the Local Hiring Policy provides that the Targeted Job Applicants shall be considered for each On -Site Job in the following order of priority: a. First Priority: Low Income Individuals living within one mile of the Project; Exhibit F -I Page 1 b. Second Priority: Low Income Individuals living in census tracts throughout the City for which household income is no greater than 80% of the Median Income; C. Third Priority: Low Income Individuals living in the City, other than the first priority and second priority Low Income Individuals; and d. Fourth Priority: City residents other than the first priority, second priority, and third priority City residents. 4. Coverage. The Local Hiring Policy shall apply to all hiring for On -Site Jobs related to the construction of the Project, by Developer and its Contractors. 5. Outreach. So that Targeted Job Applicants are made aware of the availability of On -Site Jobs, Developer or its Contractors shall advertise available On -Site Jobs in the Santa Monica Daily Press or similar local newspaper. 6. Hiring. Developer and its prime contractor shall consider in good faith all applications submitted by Targeted Job Applicants for On -Site Jobs, in accordance with their respective normal hiring practices. The City acknowledges that the Contractors shall determine in their respective subjective business judgment whether any particular Targeted Job Applicant is qualified to perform the On -Site Job for which such Targeted Job Applicant has applied. Term. The Local Hiring Policy shall continue to apply to the construction of the Project until the final certificate of occupancy for the Project has been issued by the City. Exhibit F -1 Page 2 EXHIBIT "F -2" LOCAL HIRING PROGRAM FOR PERMANENT EMPLOYMENT Local Hiring Policy For Permanent Employ. The Developer (if an Operator) or Commercial Operator shall implement a local hiring policy (the "Local Hiring Policy "), consistent with the following guidelines: Purpose. The purpose of the Local Hiring Policy is to facilitate the employment by the commercial tenants of the Project of residents of the City of Santa Monica (the "Targeted Job Applicants "), and in particular, those residents who are "Low- Income Individuals" (defined below) by ensuring Targeted Job Applicants are aware of Project employment opportunities and have a fair opportunity to apply and compete for such jobs. The goal of this policy is local hiring. 2. Findings. a. Approximately 73,000- 74,000 individuals work in the City. The City has a resident labor force of approximately 56,800. However, only about one - third (32.2 percent) of the City's resident labor force works at jobs located in the City, with the balance working outside of the City. Consequently, a significant portion of the City's resident and non- resident work force is required to commute long distances to find work, causing increased traffic on state highways, increased pollution, increased use of gas and other fuels and other serious environmental impacts. b. Due to their employment outside of the City, many residents of the City are forced to leave for work very early in the morning and return late in the evening, often leaving children and teenagers alone and unsupervised during the hours between school and the parent return from work outside the area. C. Absentee parents and unsupervised youth can result in increased problems for families, communities and the City as a whole, including, but not limited to, increased crime, more frequent and serious injuries, poor homework accomplishments, failing grades and increased high school dropout rates. d. Of the approximately 45,000 households in the City, thirty percent are defined as low- income households or lower, with eleven percent of these households defined as extremely low income and eight. percent very low income. Approximately 10.5% of the City's residents are unemployed. C. By ensuring that Targeted Job Applicants are aware of and have a fair opportunity to compete for Project jobs, this local hiring policy will facilitate job opportunities to City residents which would expand the City's Exhibit F -2 Page 1 employment base and reduce the impacts on the environment caused by long commuting times to jobs outside the area. 3. Definitions. a. "Low Income Individual" means a resident of the City of Santa Monica whose household income is no greater than 80% of the Median Income. b. "Median Income" means the median income for the Los Angeles Metropolitan Statistical Area, as published from time to time by the City in connection with its Affordable Housing Production Program pursuant to SMMC Section 9.56. C. "On -Site Jobs" means all jobs on the Project site within the non- residential uses of greater than 1,500 gross square feet, regardless of whether such job is in the nature of an employee or an independent contractor. d. "Commercial Operator" means the operators of non - residential uses on the Project site. 4. Priority for Targeted Job Applicants. Subject to Section 6 below in this Exhibit "F -2," the Local Hiring Policy provides that the Targeted Job Applicants shall be considered for each On -Site Job in the following order of priority: a. First Priority: Low Income Individuals living within one mile of the Project; b. Second Priority: Low Income Individuals living in the City, other than the first priority Low Income Individuals; and C. Third Priority: City residents other than the first priority and second priority City residents. For purposes of this Local Hiring Policy, the employer is authorized to rely on the most recent year's income tax records (W -2) and proof of residency (e.g. driver's license, utility bill, voter registration) if voluntarily submitted by a prospective job applicant for purposes of assessing a Targeted Job Applicant's place of residence and income. 5. Coverage. The Local Hiring Policy shall apply to all hiring for On -Site Jobs. Notwithstanding the foregoing, the Local Hiring Policy shall not apply to temporary employees utilized while a permanent employee is temporarily absent or while a replacement is being actively sought for a recently- departed permanent employee. Furthermore, the Local Hiring Policy shall not preclude the re- hiring of a prior employee or the transfer of an existing employee from another location. 6. Recruitment. Exhibit F -2 Page 2 a. Advanced Local Recruitment - Initial Hiring for New Business. So that Targeted Job Applicants are made aware of the availability of On -Site Jobs, at least 30 days before recruitment ( "Advanced Recruitment Period ") is opened up to general circulation for the initial hiring by a new business, Operator shall advertise available On -Site Jobs in the Santa Monica Daily Press or similar local media and electronically on a City - sponsored website, if such a resource exists. In addition, Developer shall consult with and provide written notice to at least two first source hiring organizations, which may include but are not limited to the following: (i) Local first source hiring programs. (ii) Trade unions (iii) Apprenticeship programs at local colleges (iv) Santa Monica educational institutions (v) Other non - profit organizations involved in referring eligible applicants for job opportunities b. Advanced Local Recruitment - Subsequent Hiring. For subsequent employment opportunities, the Advanced Recruitment Period for Targeted Job Applicants can be reduced to at least 7 days before recruitment is opened up to general circulation. Alternatively, the Developer may also use an established list of potential Targeted Job Applicants of not more than one year old. C. Obligations After Completion of Advanced Recruitment Period. Once these advanced local recruitment obligations have been met, Developer is not precluded from advertising regionally or nationally for employees. Hiring. Developer or Commercial Operator shall consider in good faith all applications submitted by Targeted Job Applicants for On -Site Jobs in accordance with their normal practice to hire the most qualified candidate for each position and shall be make good faith efforts to hire Targeted Job Applicants when such Applicants are most qualified or equally qualified as other applicants. The City acknowledges that the Developer or Commercial Operator shall determine in their respective subjective business judgment whether any particular Targeted Job Applicant is qualified to perform the On -Site Job for which such Targeted Job Applicant has applied. 8. Proactive Outreach. Developer shall designate a "First- Source Hiring Coordinator" (FHC) that shall manage all aspects of the Local Hiring Policy. The FHC shall be responsible for actively seeking partnerships with local first - source hiring organizations prior to employment opportunities being available. The FHC shall also be responsible for encouraging and making available information on first- source hiring to respective commercial tenants of the Project. Exhibit F -2 Page 3 The FHC shall contact new employers on the Project site to inform them of the available resources on first- source hiring. In addition to implementation of the Local Hiring Policy, the FHC can have other work duties unrelated to the Local Hiring Policy. 9. Term. The Local Hiring Policy shall apply for the life of the Project. Exhibit F -2 Page 4 EXHIBIT "G -1" PENNSYLVANIA AVENUE EXTENSION EASEMENT AREA i j{ i J � ' — �s E 1 _ R jf �/i i 111 o r �. It Iii _ _ 3AV 0.0V80100.... .. Exhibit G -1 Page 1 EXHIBIT "G -2" NEW ROAD EASEMENT AREA Exhibit G -2 Page I EXHIBIT a" PUBLIC USE AREAS - =- maw Page , w� § m®e S� § �� 2 ! ? » \ �� »- — . — § 4 d ? Ux / j .0 / § x 1 . m! . \ \.. ^ j3z \\ > ±f m�3` < maw Page , EXHIBIT "H" SANTA MONICA SIGN CODE On file with the City Clerk Exhibit Page 1 EXHIBIT "I" CONSTRUCTION MITIGATION PLAN CON -1 Construction Impact Mitigation Plan. The applicant shall prepare, implement and maintain a Construction Impact Mitigation Plan that shall be designed to: Prevent material traffic impacts on the surrounding roadway network. • Minimize parking impacts both to public parking and access to private parking to the greatest extent practicable. • Ensure safety for both those constructing the project and the surrounding community. Prevent substantial truck traffic through residential neighborhoods. The Construction Impact Mitigation Plan shall be subject to review and approval by the following City departments: Department of Public Works; Fire; Planning and Community Development; and Police. This review will ensure that the Plan has been designed in accordance with this mitigation measure. This review shall occur prior to commencement of any construction staging for the project. The Mitigation Plan shall, at a minimum, include the following: Ongoing Requirements Throughout the Duration of Construction A detailed traffic control plan for work zones shall be maintained which includes at a minimum accurate existing and proposed: parking and travel lane configurations; warning, regulatory, guide and directional signage; and area sidewalks, bicycle lanes and parking lanes. The plan shall include specific information regarding the project's construction activities that may disrupt normal pedestrian and traffic flow and the measures to address these disruptions. Such plans must be reviewed and approved by the Transportation Management Division prior to commencement of construction and implemented in accordance with this approval. Work within the public right -of -way shall be performed between 9:00 AM and 4:00 PM, including: dirt and demolition material hauling and construction material delivery. Work within the public right -of -way outside of these hours shall only be allowed after the issuance of an after -hours construction permit. • Streets and equipment shall be cleaned in accordance with established PW requirements. Exhibit Page 1 • Trucks shall only travel on a City approved construction route. Truck queuing /staging shall not be allowed on Santa Monica streets. Limited queuing may occur on the construction site itself. • Materials and equipment shall be minimally visible to the public; the preferred location for materials is to be on -site, with a minimum amount of materials within a work area in the public right -of -way, subject to a current Use of Public Property Permit. • Any requests for work before or after normal construction hours within the public right -of -way shall be subject to review and approval through the After Hours Permit process administered by the Building and Safety Division. • Off - street parking shall be provided for construction workers. This may include the use of a remote location with shuttle transport to the site, if determined necessary by the City of Santa Monica. Proiect Coordination Elements That shall Be Imnlemented Prior to Commencement of Construction • The traveling public shall be advised of impending construction activities (e.g. information signs, portable message signs, media listing /notification, implementation of an approved traffic control plan). • Any construction work requiring encroachment into public rights -of -way, detours or any other work within the public right -of -way shall require approval from the City through issuance of a Use of Public Property Permit, Excavation Permit, Sewer Permit or Oversize Load Permit, as well as any Caltrans Permits required. • Timely notification of construction schedules shall be given to all affected agencies (e.g., Big Blue Bus, Police Department, Fire Department, Department of Public Works, and Planning and Community Development Department) and to all owners and residential and commercial tenants of property within a radius of 500 feet. • Construction work shall be coordinated with affected agencies in advance of start of work. Approvals may take up to two weeks per each submittal. • The Strategic Transportation Planning Division shall approve of any haul routes, for earth, concrete or construction materials and equipment hauling. Exhibit I Page 2 CON -2(a) Diesel Eauinment Mufflers All diesel equipment shall be operated with closed engine doors and shall be equipped with factory- recommended mufflers. CON -2(b) Electrically - Powered Tools. Electrical power shall be used to run air compressors and similar power tools. CON -2(c) Restrictions on Excavation and Foundation /Conditioning. Pile driving, excavation, foundation- laying, and conditioning activities (the noisiest phases of construction) shall be restricted to between the hours of 10:00 AM and 3:00 PM, Monday through Friday, in accordance with Section 4.12.110(d) of the Santa Monica Municipal Code. CON -2(d) Additional Noise Attenuation Techniques. For all noise generating construction activity on the project site, additional noise attenuation techniques shall be employed to reduce noise levels at to 83 dB or less from 8:00 to 6:00 PM weekdays and 9:00 AM to 5:00 PM Saturdays. Per the Noise Ordinance, construction noise may exceed 83 dB if it only occurs between 10:00 AM and 3:00 PM. Such techniques may include, but are not limited to, the use of sound blankets on noise generating equipment and the construction of temporary sound barriers around the perimeter of the project construction site. CON -2(e) Construction Sign Posting. In accordance with Municipal Code Section 4.12.120, the project applicant shall be required to post a sign informing all workers and subcontractors of the time restrictions for construction activities. The sign shall also include the City telephone numbers where violations can be reported and complaints associated with construction noise can be submitted. CON -3(a) ROG Control Measures. The applicant shall ensure that architectural coatings used on the project comply with SCAQMD Rule 1113, which limits the VOC content of architectural coatings. Exhibit I Page 3 CON -3(b) Fugitive Dust Control Measures. The following shall be implemented during construction to minimize fugitive dust and associated particulate emissions: • Sufficiently water all excavated or graded material to prevent excessive amounts of dust. • Watering shall occur at least three times daily with complete coverage, preferably at the start of the day, in the late morning and after work is done for the day. • Cease all grading, earth moving or excavation activities during periods of high winds (i.e., greater than 20 mph measured as instantaneous wind gusts) so as to prevent excessive amounts of dust. Securely cover all material transported on and off -site to prevent excessive amounts of dust. • Cover all soil stockpiles. • Limit on -site vehicle speeds to 15 mph. • Install wheel washers where vehicles enter and exit the construction site onto paved roads or wash off trucks and any equipment leaving the site each trip. • Appoint a construction relations officer to act as a community liaison concerning on -site construction activity including resolution of issues related to PM10 generation. • Sweep streets at the end of the day using SCAQMD Rule 1186 certified street sweepers or roadway washing trucks if visible soil is carried onto adjacent public paved roads (recommend water sweepers with reclaimed water). Exhibit T Page 4 EXHIBIT "J" ASSIGNMENT AND ASSUMPTION AGREEMENT Recording Requested By and When Recorded Mail To: Armbruster & Goldsmith, LLP 11611 San Vicente Blvd., Suite 900 Los Angeles, CA 90049 Attn: Howard Weinberg, Esq. ASSIGNMENT AND ASSUMPTION AGREEMENT This ASSIGNMENT AND ASSUMPTION AGREEMENT ( "Agreement ") is made and entered into by and between a ( "Assignor "), and ( "Assignee "). RECITALS A. The City of Santa Monica ( "City ") and Assignor entered into that certain Development Agreement dated , 2012 (the "Development Agreement "), with respect to the real property located in the City of Santa Monica, State of California more particularly described in Exhibit "A" attached hereto (the "Project Site "). B. Assignor has obtained from the City certain development approvals and permits with respect to the development of the Project Site, including without limitation, approval of the Development Agreement and a tract map for the Project Site (collectively, the "Project Approvals "). C. Assignor intends to sell, and Assignee intends to purchase, the Project Site. D. In connection with such purchase and sale, Assignor desires to transfer all of the Assignor's right, title, and interest in and to the Development Agreement and the Project Approvals with respect to the Project Site. Assignee desires to accept such assignment from Assignor and assume the obligations of Assignor under the Development Agreement and the Project Approvals with respect to the Project Site. Exhibit J Page 1 THEREFORE, the parties agree as follows: Assignment. Assignor hereby assigns and transfers to Assignee all of Assignor's right, title, and interest in and to the Development Agreement and the Project Approvals with respect to the Project Site. Assignee hereby accepts such assignment from Assignor. 2. Assumption. Assignee expressly assumes and agrees to keep, perform, and fulfill all the terms, conditions, covenants, and obligations required to be kept, performed, and fulfilled by Assignor under the Development Agreement and the Project Approvals with respect to the Project Site. 3. Effective Date. The execution by City of the attached receipt for this Agreement shall be considered as conclusive proof of delivery of this Agreement and of the assignment and assumption contained herein. This Agreement shall be effective upon its recordation in the Official Records of Los Angeles County, California, provided that Assignee has closed the purchase and sale transaction and acquired legal title to the Project Site. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the dates set forth next io their signatures below. "ASSIGNOR" [SIGNATURE BLOCK] "ASSIGNEE" [SIGNATURE BLOCK] Exhibit J Page 2 RECEIPT BY CITY The attached ASSIGNMENT AND ASSUMPTION AGREEMENT is received by the City of Santa Monica on this day of CITY OF SANTA MONICA R Planning Director Exhibit J Page 3 EXHIBIT "K" VTP RESIDENT RELOCATION PLAN OPTION #I Move to City of Santa Monica -Owned Mountain View Mobilehome Park Any resident who chooses to move into the City -owned Mountain View Mobilehome Park will be offered the following: I. Owner shall purchase, install, and transfer title to resident a manufactured home that is reasonably similar architecturally to those previously approved by the ARB, with the exception of green screens for all units and corrugated metal roofing material for units that do not have frontage on Stewart Street. Installation of the replacement manufactured home shall include all utility connections. 2. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 3. Services of a relocation specialist and /or case manager to assist such resident through all aspects of the relocation to include, but not be limited to, explaining options and relocation assistance program details, identifying replacement sites, coordinate moving arrangements and payment of benefits. 4. Owner to assume cost of disposing trailers. Benefits are contingent upon the unit owner cooperating with the Owner in the acquisition and completing of documents for the transfer of title of the resident's existing VTP unit. OPTION 42 —Fixed Pavment In -Lieu of Actual Move Costs While replacement housing may be available, the locations of the replacement housing may not be in a location acceptable to a mobilehome owner. Therefore, any resident who chooses not to move or does not move their unit within the legal noticing requirements, an alternative mitigation benefit to facilitate moving to other replacement housing of the resident's choice, is offered as follows: 1. Owner will make the greater of $18,500 or a lump sum cash payment based on estimates by at least 3 professional moving companies for the reasonable cost to actually move a unit to another mobilehome park up to 50 miles, assuming it could be moved. The estimates may be obtained by either the Owner or the resident. 2. Payments will be made to the legal owner of the unit. Exhibit K Page I 3. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 4. Services of a relocation specialist and /or case manager to assist such resident through all aspects of the relocation to include, but not be limited to, explaining options and relocation assistance program details, identifying replacement sites, coordinate moving arrangements and payment of benefits. 5. Owner to pay to the legal owner of the unit the fair market value of the unit, as stated in Table 6 of the Tenant Impact Report. 6. Owner to assume cost of disposing trailers. Benefits are contingent upon the unit owner cooperating with the Owner in the acquisition and completing of documents for the transfer of title of the resident's existing VTP unit. OPTION #3 — Temporary Relocation during Project Construction with Move Back to VTP apartments in new Project Any resident who chooses to temporarily relocate to replacement housing that could increase their existing housing costs and elects to have the right of first refusal on rent - controlled, affordable apartments in the new project will be offered the following: Payment of tenant relocation assistance as required by SMMC Chapter 4.36, subject to paragraph 2 below. 2. (A) For low income, very low income or extremely low income households, payment of rental differential, if any, between existing total rent and replacement housing total rent for up to the earlier of project completion or seven and one -half (7.5) years of tenancy in a comparable unit. For purposes of this Agreement, a comparable housing unit shall be identified based on factors including but not be limited to: size, price, location, proximity to medical and recreational facilities, parks, community centers, shops, transportation, schools, places of worship, amenities, and if desired by the resident, location of the rental unit in the City of Santa Monica. The replacement housing total rent per month shall not exceed $1,352.00 per month. If tenant relocation assistance is less than the rental differential then tenant relocation assistance shall be subtracted from rental differential. If tenant relocation assistance exceeds rent differential, then rent differential is not proposed. (B) For households that do not qualify as low income, very low income or extremely low income, payment of rental differential, if any, between existing total rent and replacement housing total rent for up to the earlier of project completion or four (4) years of tenancy in a comparable unit. For purposes of this Agreement, a comparable housing unit shall be identified based on factors including but not be Exhibit K Page 2 limited to: size, price, location, proximity to medical and recreational facilities, parks, community centers, shops, transportation, schools, places of worship, amenities, and if desired by the resident, location of the rental unit in the City of Santa Monica. The replacement housing total rent per month shall not exceed $1,352.00 per month. If tenant relocation assistance is less than the rental differential then tenant relocation assistance shall be subtracted from rental differential. If tenant relocation assistance exceeds rent differential, then rent differential is not proposed. 3. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident 4. Owner payment of moving costs associated with moving all personal property back to the Project based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. Services of a relocation specialist and/or case manager to assist such resident through all aspects of the relocation to include, but not be limited to, explaining options and relocation assistance program details, identifying replacement sites, coordinate moving arrangements and payment of benefits. The options described above more than adequately mitigate the adverse impacts of the closure upon the residents of the VTP. 6. Upon completion of construction of the Project, Developer shall give VTP Residents who select this Option #3 a notice of their right to move in. Any VTP Resident who elects to return to the Project pursuant to any of the foregoing relocation options in this Exhibit "K" must execute Developer's standard form lease for the Project within forty -five (45) days after Developer delivers written notice to such VTP Resident that the Project is available for occupancy. If a VTP Resident fails to execute a lease and /or take occupancy within such 45 -day period, then thereafter Developer shall have no further obligation to lease a dwelling unit in the Project to any member of such VTP Resident. Senior and disabled VTP Residents who select this Option #3 and who are income qualified will be given preference on moving into the Extremely Low Income Units. 7. Upon completion of construction of the Project, if there are more than 7 qualified extremely low income VTP residents who choose this option, then for all such qualified residents in excess of 7, they shall be offered leases in the Very Low Income Units in the Project; provided that the rent payable under such leases will not exceed the Extremely Low Income rents, as defined by this Agreement. 8. Owner to pay to the legal owner of the unit the fair market value of the unit, as stated in Table 6 of the Tenant Impact Report. 9. Owner to assume cost of disposing trailers. Exhibit K Page 3 Benefits are contingent upon the unit owner cooperating with the Owner in the acquisition and completing of documents for the transfer of title of the resident's existing VTP unit. OPTION #4 — Move to Another Mobilehome Park Outside of Santa Monica Any resident, who chooses and is able to move their mobilehome or cannot move their unit (e.g. trailers and recreational vehicles) and would like to live in another mobilehome park that is not located in the City of Santa Monica, will be offered the following: 1. The reasonable cost of physically moving the mobilehome and movable improvements such as patios, carports and porches, to a new site within 50 miles of VTP, which includes but is not limited to, dismantling, packing, moving, reassembling, rebuilding, including skirting and tie - downs, and unpacking, as necessary. 2. If the unit (e.g. trailers and recreational vehicles) cannot be reasonably moved to another mobilehome park, Owner shall purchase, install, and transfer title to resident a comparable, qualifying replacement mobilehome satisfactory to the resident. For purposes of this Agreement, the factors in determining a comparable, qualifying replacement mobilehome shall include but not be limited to the following: size and amenities. 3. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 4. If an actual move by a professional moving company is chosen, as described above, payment of new utility connections, when replacing the mobilehome owner's current service (excluding any possible utility deposits charged by the new providers or additional services). 5. Services of a relocation specialist and/or case manager to assist such resident through all aspects of the relocation to include, but not be limited to, explaining options and relocation assistance program details, identifying replacement sites, coordinate moving arrangements and payment of benefits. 6. Owner to assume cost of disposing trailers. Benefits are contingent upon the unit owner cooperating with the Owner in the acquisition and completing of documents for the transfer of title of the resident's existing VTP unit. Exhibit K Page 4 OPTION #5 — Move to Conventional Rental Housing Any resident who chooses to move to conventional rental housing will be offered the following: Payment of tenant relocation assistance as required by SMMC Chapter 4.36, subject to paragraph 3 below. 2. Payment of rental differential, if any, between existing total rent and replacement housing total rent for up to four (4) years of tenancy in a comparable unit. For purposes of this Agreement, a comparable housing unit shall be identified based on factors including but not be limited to: size, price, location, proximity to medical and recreational facilities, parks, community Centers, shops, transportation, schools, places of worship, amenities, and if desired by the resident, location of the rental unit in the City of Santa Monica. The replacement housing total monthly rent shall not exceed $1,352.00 per month. If tenant relocation assistance is less than the rental differential then tenant relocation assistance shall be subtracted from rental differential. If tenant relocation assistance exceeds rent differential, then rent differential is not proposed. 3. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 4. Services of a relocation specialist and /or case manager to assist such resident through all aspects of the relocation to include, but not be limited to, explaining options and relocation assistance program details, identifying replacement sites, coordinate moving arrangements and payment of benefits. The options described above more than adequately mitigate the adverse impacts of the closure upon the residents of the VTP. 5. Owner to pay to the legal owner of the unit the fair market value of the unit, as indicated in Table 6 of the Tenant Impact Report. 6. Owner to assume cost of disposing trailers Benefits are contingent upon the unit owner cooperating with the Owner in the acquisition and completing of documents for the transfer of title of the resident's existing VTP unit. OPTION #6 — Mutual Agreement Between Owner and VTP Resident At any time in the course of the Park closure process, the residents and Owner may find it agreeable to achieve settlement by means of other compensation and /or agreement not listed in the scenarios above including moving to available spaces within the Residual Parcel. Not all of the occupants of the Park are in the same financial situation or may feel L'xhibit K Page 5 that the compensation provided by the above options does not meet their specific and unique needs. While this Agreement outlines possible relocation options in the closure process, it does not outline options tailored to the very specific needs of every affected resident. These residents and Owner may therefore agree to any and all alternative benefits, services and /or compensation to secure title for removal of the mobilehome that is deemed mutually beneficial to both parties. OPTION #7 — Seasonal Residents 1. VTP Residents who have a primary residence at a location other than VTP shall be entitled to tenant relocation assistance as required by SMMC Chapter 4.36. 2. Owner payment of moving costs associated with moving all personal property based on an actual move by a professional moving company or a $500 cash moving allowance if chosen by the resident. 3. Owner to pay to the legal owner of the unit the fair market value of the unit, as indicated in Table 6 of the Tenant Impact Report. 4. Owner to assume cost of disposing trailers. Benefits are contingent upon the unit owner cooperating with the Owner in the completing of documents for the transfer of title of the unit. RELOCATION PROCEDURES Developer shall select and execute a contract with a relocation consultant within 30 days of approval of this Agreement, which selection shall be approved by the Planning Director. The scope of services and reporting requirements in the relocation consultant's contract shall be approved by the City Attorney. The Planning Director and City Attorney shall review and approve the relocation consultant's contract within fifteen (15) business days of submittal. 2. The process and procedures for residents to claim relocation benefits and obtain advisory assistance shall be as outlined in Sections 12.3 and 12.4 of the Tenant Impact Report. The Owner shall serve the following documents, to be reviewed and approved by the Planning Director within five (5) business days of submittal, with the Notice of Closure required by Section 5.6.3 of this Agreement: • Clear explanation of payments and relocation benefits required by this Exhibit "K"; • Claim form that explains the requirements for how VTP residents may file claims for benefits; and • How residents may obtain advisory assistance from the relocation consultant. Exhibit K Page 6 4. Prior to serving Notice of Closure pursuant to Section 5.6.2 of this Agreement, Owner shall post an acceptable security with the City of Santa Monica to satisfy the obligations set forth in this relocation plan in a sum not less than $18,500 for each VTP resident. After each resident has selected a relocation option and within fifteen (15) business days of the conclusion of the 120 -day period required by Item #6 of these Relocation Procedures, Owner shall post an additional acceptable security with the City of Santa Monica that reflects the full amount of relocation options chosen by VTP residents. With respect to the additional security required for residents that select Option 2(a), Owner shall post the full amount of the rent differential for the initial five (5) year period within fifteen (15) business days of the conclusion of the 120 -day period required by Item #6 of these Relocation Procedures. If the Project is not completed within five (5) years of the Effective Date, before the expiration of that five year period, Owner shall post the full amount of the rent differential for year six. If the Project is not completed within six (6) years of the Effective Date, before the expiration of that six year period, Owner shall post the full amount of the rent differential for year seven. If the Project is not completed within seven (7) years of the Effective Date, before the expiration of that seven year period, Owner shall post the full amount of the rent differential for the following six (6) month period. Failure to timely post the additional security required by this paragraph shall constitute an Event of Monetary Default and shall be grounds for termination of this Development Agreement pursuant to Section 11.4. The relocation consultant will be responsible for administering and disbursing the relocation benefits to the residents. Notwithstanding anything to the contrary in this sub -part 4, the Owner may establish an escrow with an escrow agent and the relocation consultant, on terms reasonably acceptable to the City, and deposit into such escrow funds equal to Owner's obligations set forth above and such escrow funds shall constitute adequate security for Owner's obligations regarding payment of these relocation amounts. 5. Payments and all benefits outlined herein will only be paid and /or provided to VTP Residents who have not already relocated from the Village Trailer Park. Payments and benefits and rights herein described including but not limited to rights in the Rental Housing Units in the Project will be personal to, and will not accrue to anyone other than, the VTP Residents. No rights herein will be assignable nor shall any heirs or beneficiaries or other parties gain any rights to any of the benefits and /or payments described herein. 6. VTP Residents shall have 120 days after service of Notice of Closure pursuant to Section 5.6.2 of this Agreement to select a relocation option. Residents who do not choose an option within the 120 days shall be deemed to have chosen, at Developer's option, either (a) the cash payment portion of Option #2 or (b) to be relocated to the Residual Parcel in a qualifying mobilehome to be provided by the Developer as set forth in Option #4. Exhibit K Page 7 If and when the Condominium Units are completed in the Project and placed on the market to be sold, VTP Residents who have delivered to Developer a valid address for notices will receive written notice from Developer of the pending Condominium Unit sales and such residents will have a thirty day "first look" period to select a Condominium Unit and to purchase the same at a 5% discount from market prices. 8. Developer shall accept Section 8 vouchers, if available, from VTP Residents who return to the Project in accordance with the terms of this Exhibit "K ". MANNER OF PAYMENTS Payments and all benefits outlined herein shall be made according to the following schedule: Upon notifying the relocation consultant of the selection of a relocation option, residents who select Option #3 or #5 shall receive $2,704. Residents who select Option #1 or #4 shall receive the first and last month's rent required by the mobilehome park selected by the resident. 2. Upon notifying the relocation consultant of the selection of a relocation option, residents who select Option #2, or #7 shall receive the full payments and benefits as indicated in each Option, subject to meeting all requirements in each Option. 3. Upon notifying the relocation consultant of the selection to accept the moving allowance for moving personal property rather than have the Owner pay for the move, residents shall receive the $500 cash moving allowance. 4. Upon completing documents for the transfer of title of the resident's existing VTP unit to the Owner, residents shall receive the remainder of the payments and relocation benefits for their selected relocation option with the exception of Option #3 and Option 45. 5. For residents who select Option #3 or #5, upon completing documents for transfer of title of resident's existing VTP unit, residents shall receive full payment for the fair market value for their existing unit as indicated in Table 6 of the Tenant Impact Report and receive the rent differential in monthly installments based on the requirements of the Option selected under this Relocation Plan. Exhibit K Page 8 EXHIBIT "L" 1 gg13 3G 41 i�- i } �i 1x f, 7 GE z $ SF GyaM F k 31 Po -g Po F jt. y ! 4 1e I fr 3F3. iR td £4 S.E= 113£# #X11 =u t3 r x tzy {� E 92: t1 i G� lstz £. et i a'i i 5 !z {x z E 't ii I ff G *t 1 $ � t. aic� ➢. -..ac z E ti � 1t 3z Et$5Rff $T -f1 11 Wit } 3 - it 11 1tVI`YViUN AI cucV34d q i't F? i' x t3 `i S IS al Sip P E ii 1. i it 41111 '' g 1 s't ttt t �EY a a It � 5 — v i�51Z i } Hill d� aaii.`s ~t?F I I Y#� ! ate Ytai= £icex S3 C Ki{ K ig44r, }r [� x 4 £1ltir3 - j 0E ht 1 3 iY — i y 4 q i't F? i' x t3 `i S IS al Sip P E ii 1. i it q i't F? i' x t3 `i C if it x it rf his c € S ' ¢' S. ` GE ni f{ YEi " i Si i E es i i :I §t et l£�t it4 11i;r = f j t' < t p f w x t 3 p! t it e K O j m U ' I ' Exhibit L Page I al Sip P E ii 1. i it it x it rf his c € S ' ¢' S. ` GE ni f{ YEi " i Si i E es i i :I §t et l£�t it4 11i;r = f j t' < t p f w x t 3 p! t it e K O j m U ' I ' Exhibit L Page I s }r5 f} � 1 '1 a IE gg� I Re + D E� ' a } 3{ tr. �qn 55 F }ry j : 1 3�£ j I €T iJl A f 1 [ l € I ttt E2 ' i° 1 l a F I i i t t aig y Ip t S X33 F ��tr � pf q E t i lY lx� .� F2 #2 _gggpYj} �i�ij3Ept�t i d.� £3t Ali Exhibit L Page 2 Re I ati a } 3{ tr. �qn 55 F }ry j : iJl A [ l L R I 4 R Ip t S X33 F ��tr � -- c � , q 3 v 3y � .� F2 #2 _gggpYj} �i�ij3Ept�t i d.� £3t Ali Exhibit L Page 2 I ati a } 3{ j : iJl A [ l L R I 4 R � a q v � Exhibit L Page 2 Exhibit L Page 3 EXHIBIT "M" Exceptions to title to Residual Parcel Water rights, claims or title to water, whether or not disclosed by the public records. 2. Matters which may be disclosed by an inspection and/or by a correct Land Title Survey. The affordable housing covenant approved by the City pursuant to Section 2.6.2(n)(iv). Exhibit Page l ATTACHMENT 2 TORCA HOUSING TRUST FUND GUIDELINES `t TORCA Housing Trust Fund Source of Funds Funding for this program is provided using revenues generated pursuant to the Tenant Ownership Rights Charter Amendment, as amended by Proposition K. Eligible Borrowers - Eligible borrowers are nonprofit Housing Development Corporations (HDCs) with proven capacity to develop, own, and operate affordable housing, and whose Articles of Incorporation and Bylaws irrevocably dedicate residential property owned by the corporation to the charitable purpose of providing affordable housing to low and moderate income households. Limited partnerships with such a nonprofit housing development corporation as the general partner are also eligible borrowers if the nonprofit partner is the managing general partner throughout the term of the loan and will receive at least 51% of the developer fee. Nonprofit corporations must have a valid 501(c)(3) or (4) designation from the Internal Revenue Service. Eligible Projects Eligible projects include acquisition, rehabilitation, or new construction of rental or ownership housing projects which: (1) consist of mobile home unit(s), congregate housing, SRO units, or have four or more apartments, except where the City Manager/Executive Director finds that the project will provide a substantial public benefit; (2) are located in the City of Santa Monica; (3) are free fi•om significant adverse environmental impacts except those that can be mitigated; (4) avoid permanent involuntary tenant displacement to the greatest degree feasible in order to carry out the program and (5) have at least 51 % of the units occupied by households whose incomes do not exceed 80% of median income, adjusted for household size, at time of acquisition (except as approved by the City Manager /Executive Director). Projects which involve conversion of an existing nonresidential use to residential use are eligible. Transitional or permanent housing may be provided. Projects which involve the conversion of mobile home units to limited equity housing cooperative ownership are also permitted. Eligible Uses and Activities Program funds can be used to make loans to eligible borrowers who will provide affordable housing, principally for low and moderate income households. Eligible uses of TORCA funds include, but are not limited to, the following: While the City may not act as a borrower itself, the City Charter provides that the City may also utilize TORCA funds for the development of housing projects which meet TORCA requirements. Housing Trust Fund Guidelines Page 29 (1) acquisition and/or rehabilitation of eligible rental properties; (2) acquisition and conversion of nonresidential property to multifamily or single room occupancy rental housing units; (3) new construction of rental housing units; (4) acquisition and rehabilitation of single -room occupancy housing units; (5) predevelopment loans up to a period of 24 months for site acquisition, predevelopment activities, including professional services which cannot be obtained on a contingency basis, and construction. Such loans may be extended for up to 18 months with an additional 12 month extension option at the discretion of the Housing Manager; and (7) provide rental subsidies for temporary or permanent housing for Low- Income house- holds. Affordability Requirements All units assisted under this program shall be affordable to households with incomes that do not exceed 80% of median income, and (except for households in occupancy at time of acquisition) shall be occupied by households with incomes that do not exceed 80% of median income. Other Requirements Labor Standards: State prevailing wage requirements apply to projects of 20 units or more, or in the event that project costs exceed $1,000,000 for new construction or $250,000 for rehabilitation, as adjusted for inflation since 1987. Religious Organizations All projects must be used exclusively for secular purposes, and must be available to all persons regardless of religion. The housing may not be used for worship or religious instruction. Housing Trust Fund Guidelines Page 30 ATTACHMENT REVISED PEER REVIEW OF FISCAL IMPACT ANALYSIS NOVEMBER 2012 28 MEMORANDUM TO: Jing Yeo, Special Projects Manager DATE: November 2, 2012 General Fund Revenue Planning and Community Development $754,116 $39,535 General Fund Costs City of Santa Monica $751,238 $90,784 FROM: Roger Dale, Managing Principal FILE: #3982 The Natelson Dale Group, Inc. (TNDG) SUBJECT: Review of AECOM Fiscal Revenue Analysis Prepared for Village Trailer Park, LLC This memorandum summarizes TNDG's peer review of the Fiscal Revenue Analysis prepared by AECOM (on behalf of the project applicant) for the Village Trailer Park project. In addition to providing an independent review of AECOM's fiscal revenue projections, TNDG also developed estimates of the project's potential cost impacts to the City's General Fund (the AECOM analysis did not considerfiscal costs). All projected revenues and costs are annually recurring as of project buildout. TNDG reviewed the AECOM fiscal revenue analysis by recreating the fiscal revenue tables provided in the AECOM memorandum (dated October 19, 2012). This enabled TNDG to verify AECOM's calculations and also to validate the overall forecasting approach (in this regard, TNDG found AECOM's approach to be consistent with generally accepted fiscal analysis methodologies). The recreated tables include the summary fiscal revenue table on page 7 of AECOM's memorandum, in addition to all of the appendix tables. TNDG's fiscal analysis is provided for the two project alternatives evaluated by the applicant: 1) Base Project and 2) Residential Alternative. Summary of Net Fiscal Impact by Project Alternative The table below provides a summary of TNDG's estimate of the net fiscal impact of the three project alternatives evaluated by AECOM. A comparison of the TNDG and AECOM findings are provided in the following pages. Summary of Net Fiscal Impact by Project Alternative Source Base Project Residential Alternative Status Quo General Fund Revenue $1,006,768 $754,116 $39,535 General Fund Costs $866,547 $751,238 $90,784 Net GFImpact $140,221 $2,879 ($51,249) Additional Revenues* $676,634 $597,118 $16,827 * Includes other City (non - General Fund), school district, community college district, and water district revenue. See summary fiscal revenue table in Appendix for detailed breakout. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Fiscal Revenue Projection Review November 2, 2012 Page 2 Comparison of TNDG and AECOM Total Fiscal Revenue Forecasts The table below provides a comparison of total fiscal revenues (including both General Fund and other revenues) projected by AECOM and by TNDG. Comparison of Fiscal Revenue Projections TNDG and AECOM Source Base Project Residential Alternative Status Quo TNDG $1,683,402 $1,351,235 $56,362 AECOM $1,575,100 $1,262,300 $53,771 Difference $108,302 $88,935 $2,591 The slight differences between TNDG's revenue forecasts and AECOM's revenue forecasts primarily result from the following: • The AECOM analysis used the City's 2010 -2011 Adopted Budget to develop revenue factors, whereas TNDG used the most recent City budget (FY 2011 -13 Adopted Biennial Budget). • TNDG's analysis relied on rental rate, vacancy rate, cap rate, and sales values assumptions from the developer's pro forma (which TNDG independently reviewed for reasonableness, as summarized in a separate memorandum). AECOM's analysis relied on slightly different assumptions, as outlined in the footnotes on Table 4 of its analysis. The assumptions used by TNDG are summarized in a supplemental table (Table 17). These assumptions affect most of the revenue categories, including property tax estimates (Table 4), VLF In -Lieu Fees (Table 5), on -site and off -site sales tax revenues (Table 6 and 7), business license tax revenue (Table 9), property tax transfer revenues, and other property tax assessments (Table 11), in addition to calculating the number of employees by commercial land use (Table 2). • For purposes of estimating VLF In -Lieu Fees, TNDG used the most recent FY 2010/2011 assessed valuation estimate for the City, compared to the FY 2008/2009 estimate used in the AECOM analysis. There are several other areas where the differences between AECOM's forecasts and TNDG's forecasts result from what we believe are minor discrepancies in the AECOM analysis, as discussed below: • TABLE 2. For the Base and Residential scenarios, the difference in estimated Entertainment /Production employment results from the different occupancy rate assumptions: 95% (TNDG and developer's pro forma) versus 90% ( AECOM). TABLE 6. To calculate on -site sales tax revenues, the AECOM analysis indicates that a 3% vacancy rate is applied to "other tenants" (non - anchor).' However, the estimated vacant square feet in Table 6 is based on a 5% total vacancy rate, including anchor and non - anchor space. TNDG's ' See footnote 1 on Table 6. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Fiscal Revenue Projection Review November 2, 2012 Page 3 analysis calculates vacant square feet as described in the AECOM analysis (i.e., 3% of non - anchor space is assumed to be vacant). • TABLE 7. To calculate off -site sales tax revenues, the AECOM analysis applies a reduction factor to account for the sales that would be captured at on -site facilities, to avoid double counting of new sales tax revenues. As indicated in footnote 3 on the table, this factor should not be applied to the Status Quo scenario, as this scenario does not include the addition of new retail space. However, it appears that this factor is applied to this scenario to calculate net resident taxable sales in the AECOM analysis. In addition, TNDG has adjusted the retail -to- income expenditure ratio for the "For- Rent" households under the Residential scenario to reflect the estimated average household income in this scenario. In general, the percentage of income spent on retail goods decreases as income levels rise (more affluent households spend more on retail goods in absolute dollar terms, but less as a percentage of their total income). • TABLE 10. The AECOM analysis uses parking space number assumptions that are different from the developer's most recent pro forma for the Residential scenario. The following summarizes the differences: The discrepancy for the Resident component does not affect the fiscal revenue projections, as this land use does not generate city parking tax revenue. The parking space numbers in the AECOM analysis generate a higher city parking tax revenue projection relative to projections based on the parking space assumptions in the developer's pro forma. It should be noted that these are minor discrepancies, which do not significantly affect the fiscal revenue projections in AECOM's analysis. In addition to the above, on Table 8 the order of the residential (10 %) and commercial (5%) turnover rates should be reversed in footnote 1, and footnote 3 should also include "for -rent residential ". Also, the subheading on AECOM's Table 11— "Property Taxes above 1%" — is somewhat unclear. As discussed in the text of the AECOM analysis (page 6), these tax increment factors are applied to 1.0% of the net new assessed value, whereas the subheading appears to suggest that these rates are "above" the 1.0% and should be applied directly to the assess value estimates. Fiscal Cost Analysis In addition to evaluating the fiscal revenues that would be generated by the proposed project, TNDG's analysis also evaluates its potential General Fund fiscal costs. As shown in Table 13, TNDG used a similar approach to the AECOM analysis for deriving fiscal cost factors for the relevant General Fund categories, 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692 -9596 . Fax: (714) 692 -9597 Developer's Component AECOM Difference Pro Forma Resident 720 743 +23 Office 64 13 -51 Retail 15 65 +50 Total 799 821 +22 The discrepancy for the Resident component does not affect the fiscal revenue projections, as this land use does not generate city parking tax revenue. The parking space numbers in the AECOM analysis generate a higher city parking tax revenue projection relative to projections based on the parking space assumptions in the developer's pro forma. It should be noted that these are minor discrepancies, which do not significantly affect the fiscal revenue projections in AECOM's analysis. In addition to the above, on Table 8 the order of the residential (10 %) and commercial (5%) turnover rates should be reversed in footnote 1, and footnote 3 should also include "for -rent residential ". Also, the subheading on AECOM's Table 11— "Property Taxes above 1%" — is somewhat unclear. As discussed in the text of the AECOM analysis (page 6), these tax increment factors are applied to 1.0% of the net new assessed value, whereas the subheading appears to suggest that these rates are "above" the 1.0% and should be applied directly to the assess value estimates. Fiscal Cost Analysis In addition to evaluating the fiscal revenues that would be generated by the proposed project, TNDG's analysis also evaluates its potential General Fund fiscal costs. As shown in Table 13, TNDG used a similar approach to the AECOM analysis for deriving fiscal cost factors for the relevant General Fund categories, 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692 -9596 . Fax: (714) 692 -9597 Fiscal Revenue Projection Review November 2, 2012 Page 4 in which costs are assumed to increase proportionally with new development. For the Public Works category, TNDG projected costs based on a per square foot maintenance cost factor for pavement, which was provided by City staff (see Table 14). As shown on the table, at the time of this writing, a similar factor is not available for projecting new sidewalk maintenance costs. However, we would not expect that the inclusions of sidewalk maintenance costs would materially change the overall conclusions of the analysis. Based on the fiscal cost projection methodology outlined in Tables 13 and 14, Table 15 provides a summary of the projected General Fund costs (by individual category) that would be generated by the proposed project alternatives. Net Fiscal Impact to City's General Fund Table 16, in the Appendix, compares the projected General Fund revenues to the projected General Fund costs to estimate the project's overall net fiscal impact. A summary of the projected revenues and costs is provided below. Projected General Fund Fiscal Impact by Project Alternative General Fund Base Project Residential Alternative Status Quo Revenues $1,006,768 $754,116 $39,535 Costs $866,547 $751,238 $90,784 Net Impact $140,221 $2,879 ($51,249) Note: Totals may not sum due to rounding As shown above, the Base scenario is projected to generate a General Fund fiscal surplus of just over $140,000, while the Residential alternative is projected to generate a fiscal surplus of just under $3,000. Please feel free to contact us if you have any questions or would like to discuss any aspect of our analysis. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 APPENDIX TABLES Summary of Fiscal Revenue Impacts Residential Alternative Status City of Santa Monica General Fund Revenues Property Taxes $ 314,045 $ 273,971 $ 6,089 Sales Taxes 98,853 120,366 6,279 Business License Tax 159,534 22,143 971 Parking Facility Tax 37,298 6,240 - OtherTaxes 397,039 331,396 26,196 Total City of Santa Monica General Fund Revenues $ 1,006,768 $ 754,116 $ 39,535 Additional Fiscal Revenues to Other Funds and Other Taxing Entities Education Sales Tax Revenues $ 19,771 $ 24,073 $ 1,256 Additional Property Tax and Voted Indebtness Property Tax Assessments City of Santa Monica (Non - General Fund) 14,753 12,870 350 Santa Monica - Malibu Unified School District 406,437 354,574 9,635 Santa Monica Community College District 228,851 199,649 5,425 Metro Water District 6,823 5,952 162 Total Additional Fiscal Benefits $ 676,634 $ 597,118 $ 16,827 Total Fiscal Revenues to the City of Santa Monica and Other Taxing Entities $ 1,683,402 $ 1,351,235 $ 56,362.. Source: AECOM; TNDG Appendix Tables Table 1: Calculation of City of Santa Monica EDU Population (Household) 87,610 Persons Per Dwelling Unit 1.87 Occupied Dwelling Units 46,917 Employees 73,200 Employment Resident Equivalent 35% Employment Resident Equivalents 25,620 Employment Resident/ Persons Per DU 13,720 Hotel Rooms Supply 3,500 Occupancy 80% Occupied Hotel Rooms 2,800 Visitors per Room 1.89 Visitors / Hotel Room 5,290 Visitors / Persons Per DU 2,833 Equivalent Dwelling Units (EDU) 63,470 (1) US Census 2010 (2) CA Employment Development Department (Q3 2009), adjusted by -1.4% to reflect County employment change to year -end 2010 in -place employment. (3) Santa Monica CVB and PIKE Source: AECOM Table 2: Base Project, Residential Scenario, and Status Quo EDU Calculation Retail Employees Base Project Alternative Status Quo Population (Household) 734 704 128 Persons Per Dwelling Unit 1.87 1.87 1.20 Occupied Dwelling Units (1) 393 377 107 Retail Employees 25 40 - Employment Resident Equivalent 35% 35% 35% Employment Resident Equivalents 9 14 - Employment Resident / Persons Per DU 5 8 - Production /Entertainment Office 388 14 - Employment Resident Equivalent 35% 35% - 35% Employment Resident Equivalents 136 5 - Employment Resident / Person Per DU 73 3 - Equivalent Dwelling Units (EDU) (2) 470 387 33 (1) Status Quo: maximum occupancy (currently 66 spaces are being leased) (2) Status Quo: EDU has been adjusted to reflect lower incomes relative to the City Source: AECOM; TNDG. Table 3: City of Santa Monica 2010 - 2011 Adopted Budget - Revenue Factors (1) One -time fee and does not occur annually Source: City of Santa Monica, FY 2011 - 13 Adopted Biennial Budget FY 2010 -11 Estimated Affected by % Variable Variable Revenue Actual Total Growth Revenue Revenue Growth Factor Pro -Rata Factor Property Taxes $35,768,278 Property Tax - Secured 20,700,000 Yes Special Model See Table 4 VLF Swap 7,379,414 Yes Special Model See Table 5 Other 7,688,864 No Zero Forecast Sales Taxes 31,162,000 Yes Special Model Se Tables 6 &7 Other Taxes 102,311,000 Transient Occupancy Tax 32,369,000 No Zero Forecast Utility User Tax 31,788,500 Yes 100% $31,788,500 EDU $500.84 Real Property Tax 3,500,000 Yes Special Model See Table 8 Business License Tax 25,600,000 Yes Special Model See Table 9 Condominium Tax 15,000 Yes Not Applied (1) Vehicle License Fees 238,500 Yes 100% $238,500 Population $2.72 Parking Facility Tax 8,800,000 Yes Special Model See Table 10 Licenses /Permits 26,726,820 Franchise Tax 931,858 Yes 100% $931,858 EDU $14.68 Other 25,794,962 Yes 40% $10,317,985 EDU $162.56 Intergovernmental 841,744 No Zero Forecast Charges for Service 34,687,799 No Zero Forecast Fines /Forfeitures 17,672,450 Yes 25% $4,418,113 EDU $69.61 Investment Income 6,803,606 No Zero Forecast Rent 7,638,384 No Zero Forecast Other Revenues 4,433,834 No Zero Forecast Total $268,045,915 (1) One -time fee and does not occur annually Source: City of Santa Monica, FY 2011 - 13 Adopted Biennial Budget Table 4: Property Tax Estimates Land Use Total $ /SF Assessed Value Property Tax General Fund 0.1393 Base Project Retail 11,710 $448 $ 5,240,876 $ 52,409 $ 7,301 Production /Entertainment Office (SF) (1) 102,088 $448 45,690,052 456,901 63,646 Markel Rate Residential (Units) For -Rent (2) 54,504 $547 29,835,668 298,357 41,551 Market Rate Residential (Units) For -Sale (3) 154,332 $650 10D,315,800 1,003,158 139,740 Affordable Residential For -Rent (2) 22,479 $342 7,697,679 76,977 10,723 Less Existing Value (4,371,420) (43,714) (6,089) Total 345,113 $ 184,408,654 $ 1,844,087 $ 256,881 Residential Alternative Retail 19,120 $448 $ 8,557,262 $ 85,573 $ 11,920 Production/Entertainment Office (SF) (1) 3,740 $448 1,673,858 16,739 2,332 Residential (Units) For -Rent (2) 89,870 $596 53,537,871 535,379 74,578 Residential (Units) For -Sale (3) 155,500 $650 101,075,000 1,010,750 140,797 Affordable Residential For -Rent (2) 9,050 $45 404,757 4,048 564 Less Existing Value (4,371,420) (43,714) (6,089) Total 277,280 $ 160,877,329 $ 1,608,773 $ 224,102 Status Quo Retail - $ - $ - $ - Production /Entertainment Office (SF) - - - - Residential (Units) For -Rent (4) - 4,371,420 43,714 6,089 Residential (Units) For -Sale - - - - Less Existing Value Total $ 4,371,420 $ 43,714 $ 6,089 (1) Retail /Office: Based on $2.65 NNN rent/Mo., 95% Occupancy 6.75 % capitalization rate (2) Affordable units assume avg. gross rental rate of $1.22 to $2.87/Mo.; market rate units based on $376 -$3.81 rent/Mo.. 95% occupancy, 5.25% cap rate (3) Based on comparables on a PSF basis (4) Los Angeles County 2010 Property Tax information Statement Source: AECOM; TNDG; The Lunette Company. Table 5: Estimated VLF In -Lieu Fees (1) See Table 4 Source: AECOM; TNDG; City of Santa Monica, FY 2011 - 13 Adopted Biennial Budget, State Controller's Office Residential Base Project Alternative Status Quo 2010/2011 Assessed Valuations $ 23,805,872,223 $ 23,805,872,223 $ 23,805,872,223 2010/2011 VLF Swap $ 7,379,414 $ 7,379,414 $ 7,379,414 Project Assessed Value (Net) (1) $ 184,408,654 $ 160,877,329 $ - Cumulative Citywide AV $ 23,990,280,877 $ 23,966,749,552 $ 23,805,872,223 Share of AV due to Project 0.77% 0.68% 0.00% VLF Adjustment Attributed to Project $ 57,164 $ 49,869 $ - (1) See Table 4 Source: AECOM; TNDG; City of Santa Monica, FY 2011 - 13 Adopted Biennial Budget, State Controller's Office Table 6: Estimated On -Site Sales Tax Revenues Retail by Type (SF) Anchor Tenant Other Tenants Vacant(1) Total On -Site Sales ($000s) Anchor Tenant (2) Other Tenants (3) Total On -Site Sales Adjusted for Transfers ($000s) Anchor Tenant (4) Other Tenants (5) Total Taxable Retail Sales ($000s) Residential Base Proiect Alternative Status Quo 2,928 4,780 8,519 13,910 263 430 11,710 19,120 - $ 1,025 $ 1,673 $ - 3,408 5,564 - $ 4,432 $ 7,237 $ - $ 512 $ 837 $ 2,556 4,173 $ 3,068 $ 5,009 $ Anchor Tenant (6) $ 307 $ 502 $ - Other Tenants (7) 2,172 3,547 - Total Taxable Retail Sales ($000s) 2,480 4,049 - Annual Sales Taxes to the City @ 1.5% ($) $ 37,196 $ 60,733 $ - City of Santa Monica General Fund ($) $ 30,997 $ 50,611 $ - Recommended Education Allocation ($) $ 6,199 $ 10,122 $ - (1)Assuming 3% vacancy for "other tenants" (2)Assumes gross sales of $350 /SF (3)Assumes gross sales of $400 /SF (4)Assumes transfer adjustment of 50% (5)Assumes transfer adjustment of 75% (6)Assumes 60% of retail sales taxable (7)Assumes 85% of retail sales taxable Source: AECOM; TNDG. Table 7: Estimated Off -Site Sales Tax Revenues Residential Base Project Alternative Status Quo Resident Average HH Incomes For -Sale (1) Percent of Expenditures to Income before Taxes Estimated Percent of Taxable Sales Percent Capture in Santa Monica Taxable Sales per HH in Santa Monica For- Rent(2) Percent of Expenditures to Income before Taxes Estimated Percent of Taxable Sales Percent Capture in Santa Monica Taxable Sales per HH in Santa Monica Units For -Sale For -Rent Aggregate Resident Taxable Sales in Santa Monica ($000s) Less On -Site Capture (15 %) (3) Net Resident Taxable Sales (Off -Site) Employee Total Employees Average Daily Spend (4) Aggregate Employee Taxable Sales in Santa Monica(5) ($000s) Less On -Site Capture (75 %) Net Employee Taxable Sales (Off -Site) 388 14 $ $107,531 $ $113,863 $ - 638 70.1% 23 70.1% $ 0.0% $ 31.4% $ - 31.4% 160 0.0% 6 75.0% 6,279 75.0% $ 0.0% $ 17,752 $ 18,797 $ - $65,478 $86,674 $ 20,500 88.4% 79.3% 103.5% 30.1% 30.1% 29.5% 75.0% 75.0% 75.0% $ 13,067 $ 15,516 $ 4,694 227 216 - 166 161 107 $ 6,199 $ 6,558 $ 502 $ (930) $ (984) $ 5,269 $ 5,575 $ 502 388 14 $ 7 $ 7 $ 7 $ 638 $ 23 $ $ (479) $ (18) $ - $ 160 $ 6 $ Total Off -Site Taxable Sales ($000s) $ 5,429 $ 5,580 $ 502 Annual Sales Taxes to the City @ 1.5% $ 81,428 $ 83,706 $ 7,534 City of Santa Monica General Fund $ 67,856 $ 69,755 $ 6,279 Recommended Education Allocation $ 13,571 $ 13,951 $ 1,256 (1) Based on mortgage -to- income ratio of 25% on weighted average home cost with assumption of 20% down payment. (2) Affordable /Status Quo units based on average FY2010 HUD guidelines for Los Angeles County (assuming an equal mix of low, very low, and exi households); For -rent assumes that annual rent is equivalent to 25% of average household wages (3) Does not apply to Status Quo (4) AECOM estimate based on ICSC Employee Shopping Survey (2004) (5) Based on 235 Working Days Source: AECOM; TNDG Table 8: Estimated Real Property Transfer Tax Revenues Residential Alternative Commercial (3) $ 64,173,749 Residential (Owner occupied) 101,075,000 Total $7 165,248,749 $ 3,208,687 9,626 10,107,500 30,323 $ 13,316,187 $ 39,949 Status Quo Commercial (4) $ - $ - $ - Residential (Owner occupied) - - $ - Total $ - $ - $ - (1) Residential and commercial turnover rates estimated at 10% and 5 %, respectively. (2) $3.00 for every $1,000 of real property sale value (3) Includes retail, entertainmentiproduction office, and for rent (market and affordable) apartments (4) Assumes no sale Source: AECOM; TNDG Assessed Value Estimated Value Real Property 2010($000s) of Turnover (1) Transfer Tax (2) Base Project Commercial (3) $ 88,464,274 $ 4,423,214 $ 13,270 Residential (Owner occupied) 100,315,800 10,031,580 30,095 Total $7188,780,074 $ 14,454,794 $ 43,364 Residential Alternative Commercial (3) $ 64,173,749 Residential (Owner occupied) 101,075,000 Total $7 165,248,749 $ 3,208,687 9,626 10,107,500 30,323 $ 13,316,187 $ 39,949 Status Quo Commercial (4) $ - $ - $ - Residential (Owner occupied) - - $ - Total $ - $ - $ - (1) Residential and commercial turnover rates estimated at 10% and 5 %, respectively. (2) $3.00 for every $1,000 of real property sale value (3) Includes retail, entertainmentiproduction office, and for rent (market and affordable) apartments (4) Assumes no sale Source: AECOM; TNDG Table 9: Estimated Business License Tax (BLT) Revenues Residential Units (For -Rent) Total Revenue (4) $ 1,970,501 - $ 2,831,988 $ 274,608 BLT Estimate (3) $ 2,463 $ 3,540 $ 343 BLT Total $ 159,534 $ 22,143 $ 971 (1) Based on comparative analysis for Water Garden, Yahoo Center, and MTV building (2) Net of transfers; Please see Tables 6 & 7 (3) Assumes a BLT of $1.25 per $1,000 in gross receipts (4) Based on 2010 - 2011 rental rates as provided by the Client. Following the AECOM approach, "net' rental rates are used for this calculation. Source: AECOM; TNDG Residential Land Use Base Project Alternative Status Quo Production /Entertainment Office Square Feet 102,088 3,740 - Avg BLT PSF (1) $ 1.44 $ 1.44 $ 1.44 BLT Estimate $ 146,649 $ 5,373 $ - Retail (On -Site & Off -Site) Total Revenue (All Sales) (2) $ 8,336,983 $ 10,584,007 $ 502,298 BLT Estimate (3) $ 10,421 $ 13,230 $ 628 Residential Units (For -Rent) Total Revenue (4) $ 1,970,501 - $ 2,831,988 $ 274,608 BLT Estimate (3) $ 2,463 $ 3,540 $ 343 BLT Total $ 159,534 $ 22,143 $ 971 (1) Based on comparative analysis for Water Garden, Yahoo Center, and MTV building (2) Net of transfers; Please see Tables 6 & 7 (3) Assumes a BLT of $1.25 per $1,000 in gross receipts (4) Based on 2010 - 2011 rental rates as provided by the Client. Following the AECOM approach, "net' rental rates are used for this calculation. Source: AECOM; TNDG Table 10: Estimated Parking Tax Revenues Parking Spaces (1) City Parking Tax Base Project Resident 511 $ - $ - Production /Entertainment Office (1) 257 366,225 36,623 Retail (2) 10 6,750 675 Total 778 $ 372,975 $ 37,298 Residential Alternative Resident Production /Entertainment Office (1) Retail (2) Total Status Quo 743 $ - 13 18,525 65 43,875 821 $ 62,400 1,853 4,388 $ 6,240 Resident 107 $ - $ - Production /Entertainment Office (1) - - - Retail (2) - - - Total 107 $ - $ - (1) Assumes $118.75 per space per month (2) Assumes $56.25 per space per month; no charge for surface parking (26 spots) Source: AECOM; TNDG Table 11: property Tax and Voter Indebtedness Property Tax Assessments to City of Santa Monica Non - General Funds and Other Taxing Entities Base Project Alternative Status Quo Estimated Net new Assessed Value (1) $ 184,408,654 $ 160,877,329 $ 4,371,420 1 % Property Tax General Levy (2) Santa Monica Community College District Santa Monica - Malibu Unified School District Property Taxes Above 1% (3) Voter Indebtedness City of Santa Monica Metro Water District Community College Unified Schools 4.26% $ 78,558 $ 68,534 $ 1,862 17.22% $ 317,552 $ 277,031 $ 7,528 0.80% $ 14,753 $ 12,870 $ 350 0.37% $ 6,823 $ 5,952 $ 162 8.15% $ 150,293 $ 131,115 $ 3,563 4.82% $ 88,885 $ 77,543 $ 2,107 (1) As estimated in Table 4 (2) Rates were obtained from the Los Angeles County Assessor Rolls'09 (3) From tax bill Source: AECOM; TNDG; Los Angeles County Assessor's Office Table 12: Potential Fiscal Revenue Impact on City General Fund Revenues (1) Estimated based on actual charges and Consumer Expenditure Study (2009) Source: AECOM; TNDG. Base Project Alternative. Status Quo General Fund Revenues Property Taxes Property Tax-Secured $ 256,881 $ 224,102 $ 6,089 VLF Swap 57,164 49,869 - Sales Taxes On -Site 30,997 50,611 - Off -Site 67,856 69,755 6,279 Other Taxes Utility User Tax (1) 235,569 193,941 $ 17,700 Real Property Tax 43,364 39,949 - Business License Tax 159,534 22,143 971 Vehicle License Fee 1,998 1,916 350 Parking Facility 37,298 6,240 - Licenses /Permits - Franchise Tax 6,906 5,685 485 Other 76,462 62,950 5,365 Charges for Service - - - Fines /Forfeitures 32,740 26,955 2,297 Total General Fund Revenues $ 1,006,768 $ 754,116 $ 39,535 (1) Estimated based on actual charges and Consumer Expenditure Study (2009) Source: AECOM; TNDG. Table 13: City of Santa Monica 2010 - 2011 Adopted Budget - Expenditures (TNDG) Library - 9,885,923 Yes 100% 9,885,923 Population $112.84 Housing & Economic Development 7,061,545 No Zero Forecast Public Works 9,086,071 Yes Special Model (Table 14) Operating Budget $ 224,623,225 Source: TNDG; City of Santa Monica, FY 2011 -13 Adopted Biennial Budget Estimated Affected by Variable Variable Pro -Rata General Fund Actual Total Growth Revenue Revenue Growth Factor Factor Operating Burnet City Council $ 569,759 No Zero Forecast City Manager 7,942,981 No Zero Forecast Records & Election Services 2,052,050 Yes 100% 2,052,050 Population $23.42 City Attorney 8,017,291 No - Zero Forecast Finance 15,313,736 No Zero Forecast Human Resources 3,003,423 No Zero Forecast Information Technology 5,420,229 No Zero Forecast Community Maintenance 25,151,149 No Zero Forecast Planning & Comm. Development 13,981,436 No Zero Forecast Police Administrative Services 15,436,976 No Zero Forecast Operations 29,527,489 Yes 100% 29,527,489 EDU $465.22 Special Enforcement 12,955,857 Yes 100% 12,955,857 EDU $204.13 Criminal investigation 8,568,830 Yes 100% 8,568,830 EDU $135.01 Animal Control Unit 1,103,024 Yes 100% 1,103,024 EDU $17.38 Fire 27,295,549 Yes 100% 27,295,549 EDU $430.05 Community & Cultural Services Administration & Planning Services 784,764 No Zero Forecast _ Open Space Management 368,359 No Zero Forecast Community Recreation 5,458,179 Yes 100% 5,458,179 Population $62.30 Cultural Affairs 1,215,402 Yes 100% 1,215,402 Population $13.87 Human Services 14,423,203 Yes 100% 14,423,203 Population $164.63 Public Landscape - No Zero Forecast Library - 9,885,923 Yes 100% 9,885,923 Population $112.84 Housing & Economic Development 7,061,545 No Zero Forecast Public Works 9,086,071 Yes Special Model (Table 14) Operating Budget $ 224,623,225 Source: TNDG; City of Santa Monica, FY 2011 -13 Adopted Biennial Budget Table 14: Estimate of Public Works Costs (TNDG) Residential Base Project Alternative Status Quo Pavement Maintenance Costs Pavement length (feet) X 62 62 62 Pavement width (feet) X 19 19 19 Number of lanes X 2 2 2 Square Feet = 2,356 2,356 2,356 Maintenance Costs @ $0.45 /SF $ 1,060 $ 1,060 $ 1,060 Sidewalk Maintenance Costs Maintenance Costs @ $0.00 /SF $ - $ - - $ - Total Maintenance Costs $ 1,060 $ 1,060 $ 1,060 Source: City of Santa Monica; TNDG Table 15. Potential Fiscal Expenditure Impact on City General Fund (TNDG) Source: TNDG Residential General Fund Category Base Project - Alternative Status Quo Records & Election Services $ 17,189 $ 16,489 $ 3,007 Police Operations 218,814 180,147 15,352 Special Enforcement 96,010 79,044 6,736 Criminal Investigation 63,499 52,278 4,455 Animal Control Unit 8,174 6,730 573 Fire 202,274 166,530 14,192 Community & Cultural Services Community Recreation 45,720 43,859 7,999 Cultural Affairs 10,181 9,766 1,781 Human Services 120,816 115,897 21,138 Library 82,809 79,438 14,489 Public Works 1,060 1,060 1,060 Total General Fund Expenditures $ 866,547 $ 751,238 $ 90,784 Source: TNDG Table 16: General Fund Fiscal Impact Summary (TNDG) Residential General Fund Category Base Project Alternative Status Quo General Fund Revenues Property Taxes $ 314,045 Sales Taxes 98,853 Business License Tax 159,534 Parking Facility Tax 37,298 Other Taxes 397,039 Total Revenue $ 1,006,768 General Fund Expenses Records & Election Services $ 17,189 Police 386,497 Fire 202,274 Community & Cultural Services 176,717 Library 82,809 Public Works 1,060 Total Expenses $ 866,547 $ 273,971 120,366 22,143 6,240 331,396 $ 754,116 $ 16,489 318,198 166,530 169,523 79,438 $ 6,089 6,279 971 26,196 $ 39,535 $ 3,007 27,117 14,192 30,919 14,489 1,060 1,060 $ 751,238 $ 90,784 Net Fiscal Impact $ 140,221 $ 2,879 $ (51,249) Source: TNDG Table 17: Key Assumptions from Developer's Pro Forma Land Use Occupancy Rate Gross RenUSF Expenses/ SF Annual NOI Cap Rate Base Project Retail 95.0% $3.75 $1.10 $353,759 _ 6.75% Production /Entertainment Office 95.0% $3.75 $1.10 $3,084,078 6.75% Residential (Units) For -Rent 95.0% $3.81 $1.29 $1,566,373 5.25% Residential (Units) For -Sale (1) 100.0% $650.00 N/A N/A N/A Affordable Residential For -Rent 95.0% $2.87 $1.29 $404,128 5.25% Total $ 5,408,338 Residential Alternative Retail 95.0% $3.75 $1.10 $577,615 6.75% Production /Entertainment Office 95.0% $3.75 $1.10 $112,985 6.75% Residential (Units) For -Rent 95.0% $3.76 $1.02 $2,810,738 5.25% Residential (Units) For -Sale (1) 100.0% $650.00 N/A N/A N/A Affordable Residential For -Rent 95.0% $1.22 $1.02 $21,250 5.25% Total $ 3,522,589 (1) Gross rent is equivalent to per square foot sales price Source: The Luzzatto Company; TNDG Memorandum AECOM 515 S. Flower Street, 9" Street Los Angeles, CA 90071 www.aecom.com 213 593 8520 tel 310 593 7715 fax To Village Trailer Park, LLC Pages 1 of 21 cc Subject Fiscal Revenue Impact Analysis of Village Trailer Park From Date AECOM October 19, 2012 Introduction Village Trailer Park, LLC (Client) retained the Economics practice at AECOM (AECOM) to conduct a fiscal revenue impact analysis (FIA) for the proposed redevelopment of the Village Trailer Park (Base Project)'. The Base Project is a transit - oriented, mixed -use village comprised of entertainment/production office, residential and retail uses, as well as public open space amenities on approximately 4 acres (Project Site) located in the City of Santa Monica (City). The Project Site is located near the intersection of Colorado Avenue and Stanford Street in proximity to the future Expo Light -Rail station in the City. AECOM evaluated the Base Project, an alternative development scenario, and no development scenario. • The Base Project consists of approximately 102,100 leasable square feet of entertainmenUproduction office uses, 11,700 leasable square feet of retail space, and 393 residential units2. i The alternative (Residential Scenario) development consists of approximately 3,700 leasable square feet of entertainment/production office uses, 19,000 leasable square feet of retail space, and 377 residential units3. • The current Project Site is a trailer home park, consisting of 107 spaces, of which 75 spaces were leased (54 by full -time residents and 21 as vacant, storage or absentee owned units) as of January 31, 2010. Under this scenario, no development would occur (Status Quo). Summary of Findings As presented below, the Base Project, Residential Scenario, and Status Quo will generate fiscal revenue benefits to the City and other taxing entities, such as the Santa Monica - Malibu Unified School District, the Santa Monica Community College District, and the Metro Water District. Based on our analysis, the Base Project is estimated to generate total annual fiscal revenues of approximately $1.58 million. The Residential Scenario is anticipated to create approximately $1.26 t As presented in the Environmental Impact Statement Includes 52 affordable units. 3 Includes 16 affordable units. AECOM Project No. 60223564 Page 1 million in fiscal benefit and if no development occurs in the Status Quo option, approximately $53,800 will continue to flow to the City and other taxing entities. It is important to note that this report does not rely on a market study and makes general assumptions about the project at buildout under a future year of stabilized operations. Summary of Impacts by Scenario Annual City of Additional Annual Santa Monica Benefits to Other General Fund Funds and Taxing Total Annual Revenues Entities Fiscal Benefits Base Project $953,100 $622,000 $1,575,100 Residential Alternative $715,000 $547,300 $1,262,300 Status Quo $37,200 $16,571 $53,771 Note: Please see Table 11 and Table 12 for a detailed review of specific tiscal revenue impacts. Source: AECOM Development Program Implementation of the Base Project will require the demolition of the existing surface parking and trailer park infrastructure at the Project Site. The demolished structures would be replaced by approximately 399,600 gross square feet" of building area within four new buildings. Building A (180,500 gross square feet) and Building B (50,000 gross square feet), located nearest to Colorado Avenue would include mixed -use development incorporating residential, retail (with access along Colorado Avenue), and entertainment/production office space. Building C (67,100 gross square feet) is single -use building for entertainment/production office space. While Buildings A, B, and C front the proposed new road adjacent to Colorado Avenue, Building D (101,900 gross square feet) is a single - use residential building at the corner of Stanford Street and Pennsylvania Avenue. Parking for the Base Project will be provided within up to two levels of subterranean parking and limited ground level parking for the retail uses. In total, current plans call for just over 800 parking spaces5. Residential Scenario and Status Quo Program In addition to the project scenario outlined above, the Client has requested AECOM to analyze an additional development scenario that utilizes a similar building configuration with a different mix of land uses. The Residential Scenario includes 341,290 gross square feet of building, including approximately 316,350 gross square feet of residential and 24,940 gross square feet of entertainment/production office and retail uses. The Residential Scenario provides 799 parking spaces. This scenario also includes retaining 10 existing trailer pads within the development program. The Status Quo scenario represents no change from current land uses on the Development Site. Methodology Introduction AECOM has estimated the fiscal revenue impact resulting from the development alternatives in comparison to the Status Quo. AECOM reviewed fiscal revenue impacts to the City's General Fund (the City's source of discretionary funding) as well as revenues generated to other relevant " The total does not include the underground parking garage. 5 Not inclusive of addition bicycle parking spaces that are available both above and below grade. AECOM Project No. 11280192.01 Page 2 beneficiaries. A number of important assumptions have been made in this report. These assumptions include the following: • The analysis results present fiscal revenue impacts to the City assuming full build -out of the Base Project and Residential Scenario at a year of stabilized project occupancy in comparison to the Status Quo (no- development option); • One -time impacts associated with development have not been included 6; • All values are presented in constant 2011 dollars; and • The FIA is based on the "FY2009 -10 Estimated Actual" budget as provided by the City's 2010 2011 Adopted Budget. Special models are used to calculate major revenue streams, such as property taxes and sales taxes, while a proportional approach is used to allocate revenues that are expected to increase proportionally with new development. Under the proportional method, AECOM calculates pro rata (per unit) factors under conditions as of the year of analysis. Pro rata factors are then applied to the incremental development of the proposed program at build -out. In this case, we have primarily utilized a pro rata factor called the equivalent dwelling unit (EDU). The EDU calculation incorporates a variety of inputs to establish a factor that represents the City's population (resident households), in -place employment Qobs), and visitor population (hotel rooms). The categories are adjusted to reflect their estimated "equivalency" to the City's total service - demanding population based on their respective effect on the General Fund (Table 1). Using a similar methodology described above, AECOM estimates the Base Project, Residential Scenario, and Status Quo's EDU' that will be applied to specific General Fund revenues (Table 2). Unrestricted Genera/ Fund Revenues As described above, pro rata factors are used to determine a number of General Fund Revenues. To estimate fiscal impacts not accounted for using the proportional EDU approach described above, we have created special models to estimate the development alternatives fiscal benefit to the City. Please see Table 3. Such models were developed for the following revenue streams: • Property Tax; • Motor Vehicle License In -Lieu Fees; • Sales Tax; • Real Property Transfer Tax; • Business License Tax; and • Parking Facility Tax. In some instances, we have not estimated revenues as the revenue sources were not related new development (e.g. investment income). A more detailed discussion of the models and key assumptions are presented below. 6 This would include various City development permits and fees. ' The Status Quo EDU reflects an adjustment to reflect revenues generated by existing (or future) residents at the Village Trailer Park will be less than typical residents of the City. We have assumed that they are 30 percent the average based on the ratio of average household income in the City to the assumed average household income in the Village Trailer Park. AECOM Project No. 11280192.01 Page 3 0 II Property Tax Direct property tax impacts are calculated by estimating the assessed value of the proposed development. The City's General Fund receives approximately 14% of the 1.0% property tax levied against real property. (Property taxes to City of Santa Monica non - general funds and other taxing entities are described in the next section, Additional Benefits.) It is important to note that adjustments for appreciation, inflation, and Proposition 13 were not made. For the purpose of this analysis, AECOM is evaluating the Base Project and Residential Scenario under the assumption that is fully absorbed and operating under the assumptions provided herein. Please see Table 4. The assessed value of the Status Quo is based on the annual property tax information statement for fiscal year Julyl, 2010 to June 30, 2011. Motor Vehicle In -Lieu Fees (MVLF) Revenues The vehicle license fee (VLF) rate was amended by the State of California in late 2004, significantly reducing VLF revenues to municipal governments. The actual VLF allocations are allocated to municipalities based on population growth. However, in order to make up for the loss in VLF revenues post the 2004 adjustment, the state compensates local governments by'backfilling' the gap with a portion of property tax revenues. This amount, referred to as the Motor Vehicle in Lieu Fees (MVLF) is based on proportional growth in assessed valuation of real property within a jurisdiction. AECOM has used MVLF allocations published by the State Controller's Office, Division of Accounting and Reporting to determine base values. MVLF revenues attributable to the development alternatives are derived using the change in assessed property values compared to the total assessed value basis in the City. Please see Table 5. Sales Tax AECOM has evaluated sales tax capture within the City based on the "on -site' sales generated from the new commercial development as well as "off- site" purchases generated from residents and employees associated with the development alternatives. Proposition Y, passed in November 2010, increased the total sales tax rate in the City from 9.75 percent to 10.25 percent. The half cent tax increase will go to the City's General Fund, but, per an advisory measure, Proposition YY, it is recommended that half of this amount be remitted to assist in education. With this recent rate increase, the City's General Fund will receive up to 1.50 percent of sales tax receipts, with 0.25 percent of this amount recommended to be remitted to assist in education. Please see Table 6 and Table 7. Some key assumptions for on and off -site are as follows: On -Site Sales: Upon reaching stabilized operation, on -site sales for the development alternatives are estimated to range between $350 and $400 per square foot. AECOM has adjusted sales for transfers (sales attracted away from existing retailers in the City) and to reflect the total percent of goods subject to sales tax. Off -Site Sales: In order to evaluate retail spending potential, AECOM has estimated the average household income by applying standard financing terms to approximate the required annual income needed to purchase the new for -sale market rate units. Gross household income has been reduced to reflect the percent of gross income actually spent on consumer goods, anticipated spending capture within the City, spending on -site, as well as the percent of sales that could generate sale tax. Affordable units assumed incomes are based on HUD standards and an equal mix of extremely low, AECOM Project No. 11280192.01 Page 4 EIER10 AJ very low, and low income units. Current residents of the Village Trailer Parks are assumed to have the same income as those estimated for the proposed new affordable units. Employee Expenditures: Average annual per capita expenditures are estimated at $7 per new on -site employee per working day. The retail purchases associated with employees are based on survey data conducted by the International Council of Shopping Centers (2004) and adjusted by AECOM. Total spending has been reduced by the anticipated employee support for on -site retail sales. Real Property Transfer Tax The City levies a $3.00 tax for every $1,000 of real property sale value. AECOM has assumed that 10 percent of the residential and 10 percent of the commercial will be subject to the Real Property Transfer Taxa. Please see Table 8. Business License Tax In most cases, the City levies a Business License Tax (BLT) based on the gross receipts of the business. There are various tax rates ranging from $1.25 to $5.00 per $1,000 of gross receipts. AECOM has utilized a comparative approach to estimate BLT created by existing entertainment/production office users in the development alternatives. Other retail and existing Tor- rent uses are estimated based on assumptions provided herein. Please see Table 9. Parking Facility Tax The City charges a tax of 10% on all gross receipts collected by managed parking facilities. Using a comparative approach, AECOM has estimated market parking rates generated by the development alternatives using data compiled from parking operations in the area. Please see Table 10. Additional Fiscal Revenue Benefits In addition to the General Fund receipts, the development alternatives will generate a number of additional fiscal benefits to various taxing entities in the greater Santa Monica area, including the Santa Monica - Malibu Unified School District, Santa Monica Community College District, and the Metro Water District. Additional fiscal revenue benefits include the allocation of the new sales tax to education and property taxes to other relevant taxing entities. Education Sales Tax Revenues As described above, a new half cent sales tax was implemented within the City and an advisory measure recommends that half of this new sales tax, 0.25°/x, be used towards education. Sales taxes are estimated as described above and shown in Table 6 and Table 7. The 0.25% education allocation is included within the additional fiscal revenue benefits estimate. Property Taxes to Other Taxing Entities and Voter Approved Indebtedness Property Tax Assessments As described above, the City's General Fund receives approximately 14% of the 1.0% property tax levied against real property. In addition, other funds and relevant taxing entities will receive fiscal revenues from the proposed development. 'This equates to average residential and commercial turnover once every 5 and 10 years respectively. AECOM Project No. 11280192.01 Page 5 a The Santa Monica - Malibu Unified School District will receive approximately 17% of the 1.0% property tax general levy and the Santa Monica Community College District will receive approximately 4% of the 1.0% property tax general levy. These property tax rates are applied to the 1 % property tax share of the Base Project's estimated net new assessed value, to estimate the property tax receipts to the City's taxing entities. In addition to the 1.0% property tax distribution, the development alternatives will result in additional revenues to various taxing entities to help repay voter approved bonds. The Santa Monica - Malibu Unified School District will receive 4.8% of 1.0% of the net new assessed value to repay voter approved bonds. The Community College District will receive 8.2% of 1.0% of the net new assessed value to repay voter approved bonds. The City will receive 0.8% of 1.0% of the net new assessed value to repay voter approved bonds. Finally, the Metro Water District will receive 0.4% of 1.0% of the net new assessed value to repay voter approved bonds. Calculation of these property tax receipts are shown in Table 11. Findings Using the above - described methodology, AECOM estimated the fiscal revenue impacts shown on the next page. Assuming the Base Project and Residential Scenario perform according to target sales goals and operating characteristics estimated herein, the proposed development could generate between $953,100 and $715,000 in net new annual revenue to the City's General Fund and an additional $622,000 to $547,300 in net new annual revenues to other City funds and taxing entities, respectively. The Status Quo option will continue to generate approximately $37,200 in General Fund fiscal revenues and $16,571 to other City funds and taxing entities an annual basis. Property taxes, sales taxes, and business license taxes are the major generators of General Fund revenues in each of the scenarios. Property tax is the single largest fiscal contributor, making up over 30 percent of projected General Fund revenues in each new development scenario. BLT is the next largest revenue generator in the Base Project, while sales tax is the next largest revenue generator in the Residential Scenario. In total, the Proposed Project and Residential Scenario are estimated to generate total annual fiscal revenues of approximately $1.58 million and $1.27 million to the City and other taxing entities, respectively. The Status Quo option will continue to generate approximately $53,800 to the City and other taxing entities an annual basis. A more detailed discussion of revenues by line item is provided on the following page. AECOM Project No. 11280192.01 •" of Fiscal Revenue I Additional Fiscal Revenues to Other Funds and Other Taxing Entities Education Sales Tax Revenues Additional Property Tax and Voted Indebtedness Property Tax Assessments City of Santa Monica (Non - General Fund) Santa Monica - Malibu Unified School District Santa Monica Community College District Metro Water District Total Additional Fiscal Benefits $ 18,700 $ 23,600 $ 1,000 13,500 11,700 349 373,300 324,100 9,635 210,200 182,500 5,425 6.300 5.400 162 $ 622,000 $ 547,300 $ 16,571 Total Fiscal Revenues to the City of Santa Monica and OtherTaxing Entities $ 1,575,100 $ 1,262,300 $ 53,771 Source: AECOM AECOM Project No. 11280192.01 Page 7 Residential Base Project Scenario Status Quo City of Santa Monica General Fund Revenues Property Taxes $ 289,600 $ 251,500 $ 6,100 Sales Taxes 93,500 118,000 5,300 Business license Tax 159,100 21,500 800 Parking Facility Tax 37,300 10,100 - OtherTaxes $373,60 0 313.900 25.000 Total City of Santa Monica General Fund Revenues $ 953,100. $ 715,000 $ 37,200 Additional Fiscal Revenues to Other Funds and Other Taxing Entities Education Sales Tax Revenues Additional Property Tax and Voted Indebtedness Property Tax Assessments City of Santa Monica (Non - General Fund) Santa Monica - Malibu Unified School District Santa Monica Community College District Metro Water District Total Additional Fiscal Benefits $ 18,700 $ 23,600 $ 1,000 13,500 11,700 349 373,300 324,100 9,635 210,200 182,500 5,425 6.300 5.400 162 $ 622,000 $ 547,300 $ 16,571 Total Fiscal Revenues to the City of Santa Monica and OtherTaxing Entities $ 1,575,100 $ 1,262,300 $ 53,771 Source: AECOM AECOM Project No. 11280192.01 Page 7 Appendix Tables Table 1: Calculation of City of Santa Monica EDU Population(Household)1 87,610 Persons Per Dwelling Unit 1.87 Occupied Dwelling Units 46,917 Employees 2 73,200 Employment Resident Equivalent 35% Employment Resident Equivalents 25,620 Employment Resident / Persons Per DU 13,720 Hotel Rooms 3 Supply 3,500 Occupancy 800/0 Occupied Hotel Rooms 2,800 Visitors Per Room 1.89 Visitors/ Hotel Room 5,290 Visitors/ Persons Per DU 2,833 Equivalent Dwelling Units (EDU) 63,470 ' US Census (2010) 2 CA Employment Development Department (Q3 2009), adjusted by-1.4% to reflect County employment change to year -end 2010 in -place employment. 3 Santa Monica CVB & PKF Source: AECOM AECOM Project No. 11280192.01 Page 8 * Table 2: Base Project, Residential Scenario, and Status Quo EDU Calculation Production /Entertainment Office Base Project Residential Scenario Status Quo Population (Household) 734 704 128 Persons Per Dwelling Unit 1.87 1.87 1.20 Occupied Dwelling Units' 393 377 107 Retail Employees 25 40 0 Employment Resident Equivalent 35% 35% 35% Employment Resident Equivalents 9 14 0 Employment Resident/ Persons Per DU 5 8 0 Production /Entertainment Office 368 13 0 Employment Resident Equivalent 35% 35% 35% Employment Resident Equivalents 129 5 0 Employment Resident/ Persons Per DU 69 3 0 Equivalent Dwelling Units (EDU) 2 467 387 33 I Status Quo:maximum occupancy (Currently 66spaces are being leased) ' Status Quo: EDU has been adjusted to reflect lower incomes relative to the Qty Source: AECOM AECOM Project No. 11280192.01 Page 9 Table 3: City of Santa Monica 2010 — 2011 Adopted Budget - Revenue Factors FY 2009 -10 Estimated Affected Actual by %Variable Variable Revenue Total Growth Revenue Revenue Growth Factor Pro -Rata Factor Property Taxes $37,326,055 Property Tax- Secured 20,938,865 Yes Special Model See Table VLF Swap 7,445,750 Yes Special Model See Tables Other 8,941,440 No Zero Forecast Sales Taxes 26,796,000 Yes Special Models See Tables 6 &7 Other Taxes 98,336,600 Transient Occupancy Tax 28,750,000 No Zero Forecast Utility User Tax 31,681,000 Yes 100% $31,681,000 EDU $499.15 Real Property Tax 3,200,000 Yes Special Model See Table 8 Business License Tax 26,622,000 Yes Special Model See Table 9 Condominium Tax 50,000 Yes Not Applied' Vehicle License Fees 233,600 Yes 1005, $233,600 Population $2.67 Parking Facility Tax 7,800,000 Yes Special Model See Table 10 Licenses /Permits 20,191,825 Franchise Tax 1,679,679 Yes 1009, $1,679,679 EDU $26.46 Other 18,512,146 Yes 40% $7,404,858 EDU $116.67 Intergovernmental 593,196 No Zero Forecast Charges for Service 30,190,904 No Zero Forecast Fines /Forfeitures 17,149,506 Yes 25% $4,287,377 EDU $67.55 Investment Income 4,645,200 No Zero Forecast Rent 6,305,861 No Zero Forecast Other Revenues 2,692,588 No Zero Forecast Total $244,227,735 ' One -time fee and does not occur a urn a I I Source: City of Santa Monica, 2010 - 2011 Adopted Budget AECOM Project No. 11280192.01 Page 10 Table 4: Property Tax Estimates Residential Scenario Retail (SF)' Production /Entertai nment Office (SF)' Residential (Units) For -Rent' Residential (Units) For -Sale 3 Affordable Residential For -Rent' Less Existing Value Total (Rounded) 19,120 $601 $ 11,494,000 $ Assessed 16,011 City's Share to $383 1,434,000 14,340 Value 89,850 General Fund Land Use Total $ /SF (rounded) Property Tax (0.1393) Base Project 135,383 9,050 $145 1,315,000 13,150 Retail (SF) 11,710 $592 $ 6,937,000 $ 69,370 $ 9,663 Production /Entertainment Office( SF) 1 102,088 $376 38,424,000 384,240 53,525 Market Rate Residential For- Rent' 54,504 $445 24,264,000 242,640 33,800 Market Rate Residential For -Sale' 154,332 $625 96,458,000 964,580 134,366 Affordable Residential For -Rent° 22,479 $341 7,659,000 76,590 10,669 Less Existing Value (4,371,420) (43,714) (6,089) Total (Rounded) $ 169,370,600 $ 1,693,700 $ 235,900 Residential Scenario Retail (SF)' Production /Entertai nment Office (SF)' Residential (Units) For -Rent' Residential (Units) For -Sale 3 Affordable Residential For -Rent' Less Existing Value Total (Rounded) 19,120 $601 $ 11,494,000 $ 114,940 $ 16,011 3,740 $383 1,434,000 14,340 1,998 89,850 $445 $ 39,999,000 399,990 55,719 155,500 $625 97,188,000 971,880 135,383 9,050 $145 1,315,000 13,150 1,832 (4371420) (43714) (6089) $147,058,600 $ 1,470,600 $ 204,900 Status Quo Retail SF) - Production /Entertainment Office (SF) - - - - Residential (Units) For -Rent' - 4,371,420 43,714 6,089 Residential (Units) For -Sale - - - - Less Existing Value Total (Rounded) $ 4,371,400 $ 43,700 $ 6,100 ' Retail: Based on $3]5 NNN rent/MO., 95% occupancy, J %rapt[. I Worm rate; Office: Based on $3.50 FS rent/M.,90% occupam , 8% capita IlmUme rate 'Affordable units reflects average rental rate of $2.27 - $1.22/Mo. with market rate units at average $3 .75 rent/Mo.,95% occupant, 6.01t capita l ization rate ' Based on comp. rables on a PSF bests ° Los Angeles Countv3010Proproh Tax l nfounation statement Source: AECOM AECOM Project No. 11280192.01 Page 11 l Table 5: Estimated VLF In -Lieu Fees 'Please see Table 4 Source: AECOM AECOM Project No. 11280192.01 Page 12 Residential Base Project Scenario Status Quo 2008 /2009 Assessed Valuations $23,488,853,129 $23,488,853,129 $23,488,553,129 2009 /2010 VLF Swap $ 7,445,750 $ 7,445,750 $ 7,445,750 Project Assessed Value (Net) 1 $ 169,370,600 $ 147,058,600 $ - Cumulative Citywide AV $ 23,658,223,729 $ 23,635,911,729 $ 23,488,853,129 Share of AV due to Project 0.7291 0.63% 0.00% VLF Adjustment Attributed To Project (Rounded) 53,700 46,600 0 'Please see Table 4 Source: AECOM AECOM Project No. 11280192.01 Page 12 Table 6: Estimated On -Site Sales Tax Revenues Retail by Type (SF) Anchor Tenant Other Tenants Vacant 1 Total On -Site Sales ($000s) AnchorTenant2 Other Tenants 3 Total On -site Sales Adjusted for Transfers ($000s) AnchorTenant4 OtherTenantss Total Taxable Retail Sales ($000s) Residential Base Project Scenario Status Quo 2,928 4;780 0 8,197 13,380 0 586 960 0 11,710 19,120 0 $ 1,020 $ 1,670 $ 3,280 5,350 $ 4,300 $ 7,020 $ $ 510 $ 840 $ 2,460 $ 4,010 $ 2,970 $ 4,850 $ Anchor Tenant 6 $ 310 $ 500 $ OtherTenants7 2,090 3,410 Total Taxable Retail Sales ($000s) 2.400 3,910 Annual Sales Taxes to the City @1.5 %($) $ 36,000 $ 58,650 $ City of Santa Monica General Fund ($) $ 30,000 $ 48,900 $ Recommended Education Allocation ($) $ 6,000 $ 9,750 $ i Assuming3% vacancy for "other tenants" Assumes gross sales of$350 /SF 3 Assumes gross sales of$400 /SF ° Assumes transfer adjustment of 50% s Assumes transfer adjustment of 75% 6 Assumes 60% of retail sales taxable 7 Assumes 85% of retail sales taxable Source: AECOM Project No. 11280192.01 Page 13 *M Table 7: Estimated Off-Site Sales Tax Revenues Residential Scenario Status Resident $ 61,000 $ 87,000 $ Average HH Incomes Pe rce nt of Expend !to res to Income befo re Taxes 88.4% For -Sale' $ 101,000 $104,000 $ Percent of Expenditures to Income before Taxes 70.1Y 70.1% Esti mated Pe rce nt of Taxable Sales 31.4% 31.4% Pe rce nt Captu re i n Santa Mon ica 750% 75.0% _ Taxable Sales perHH in Santa Monica $ 16,660 $ 17,150 $ For -Re nt2 $ 61,000 $ 87,000 $ 20,500 Pe rce nt of Expend !to res to Income befo re Taxes 88.4% 88.45/ 103.55/ Estimated Percent of Taxable Sales 30.11 30.11 29.5% Percent Capture in Santa Monica 75_0% 75_0% 75_0% Taxable Sales per HH in Santa Monica $ 12,170 $ 17,360 $ 4,700 Units For -Sale For -Rent Aggregate Resident Taxable Sales in Santa Monica ($000s) Less On -Site Capture (15 %) a Net Resident Taxable Sales (Off -Site) Employee Total Employees Average Daily Spend ° Aggregate Employee Taxable Sales in Santa Monica 5($0005) Less On -Site Capture (75 %) Net Employee Taxable Sales (Off -Site) 227 216 - 166 161 107 $ 5,800 $ 6,500 $ 500 $ (870) $ (980) $ (80) $ 4,930 $ 5,520 $ 420 368 13 0 $ 7 $ 7 $ 605 $ 22 $ - $ (453) $ (17) $ $ 151 $ 6 $ Total Off -Site Taxable Sales ($000s) $ 5,080 $ 5,530 $ 420 Annual Sales Taxes to the City @1.5% $ 76,200 $ 82,950 $ 6,300 City of Santa Monica General Fund $ 63,500 $ 69,100 $ 5,300 Recommended Education Allocation $ 12,700 $ 13,850 $ 1,000 r Based on mortgage -to- income ratioof25 %on weighted average home costwith assumption of20 %down payment 'Affordable units based on 2012guidelines for Cityof Santa Monica for "Low Income" households; For -rent assumes that annual rent is equiva l l ent to 30% of average household wages ' Does not applyto Status Quo ° AECOM estimate based on ICSC Employee Shopping Survey (2004) ' Based on 235 working days Source: AECOM AECOM Project No. 11280192.01 Page 14 Table 8: Estimated Real Property Transfer Tax Revenues Base Project Commercia13 Residential (Owner occupied) Total Residential Scenario Commercial3 Residential (Owner occupied) Total Status Quo Commercial ° Residential (Owner occupied) Total Assessed Estimated Value 2010 Value of Real Property ($000s) Turnover' Transfer Taxz $ 77,284,000 $ 3,864,200 $ 11,600 96,458,000 9,645,800 28,900 $173,742,000 $ 13,510,000 $ 40,500 $ 54,242,000 $ 2,712,100 $ 8,100 97,188,000 9,718,800 29,200 $151,430,000 $ 12,430,900 $ 37,300 ' Residential and commercial turnover rate estimated at 5% and 10 %, respectively. 2$3.00for every$1,000 of real propertysale value 3 Includes retail, entertainment /production office °Assumes no sale. Source: AECOM AECOM Project No. 11280192.01 Page 15 O T Table 9: Estimated Business License Tax (BLT) Revenues Residential Land Use Base Project Scenario Status Quo Production /Entertainment Office Square Feet 102,088 3,740 0 Avg BLT PSF 1 $ 1.44 $ 1.44 BLT Estimate (Rounded) $ 146,600 $ 5,400 $ - Retail (On -Site & Off -Site) Total Revenue (All Sales) z BLT Estimate (Rounded) 3 Residential Units (For -Rent) Total Revenue 4 BLT Estimate 3 $ 8,051,100 $ 10,375,500 $ 420,000 $ 10,100 $ 13,000 $ 500 $1,915,000 $ 2,479,000 $ 274,608 $ 2,400 $ 3,100 $ 300 BLTTotal (Rounded) $ 159,100 $ _ 21,500 $ 800 I Based on comparative analysis for Water Garden, Yahoo Center, and MTV building 3 Netof transfers; Please see Tables 6and 7 a Assumes a BLT of $1.25 per $1,000 in gross receipts Based on 2010- 2011 rental rates as provided bythe Client, includes income from affordable units Source: AECOM AECOM Project No. 11280192.01 Page 16 0 Table 10: Estimated Parking Tax Revenues Residential Scenario Resident Production /Entertainment Office 1 Retail 2 Total Status Quo 720 $ - $ - 64 91,200 9,100 15 10,100 1;000 799 $ 101,300 $ 10,100 Resident 107 $ $ Production /Entertainment Office - Retail - Total 107 $ $ ' Assumes $118.75 per space per month ' Assumes $56.25 per space per month; No cha rge for surface parking (26 Spots) ' Assumes additional unpaid visitor parking Source: AECOM AECOM Project No. 11280192.01 Page 17 Parking Annual City Parking Spaces Revenue Tax Base Project Resident 511 $ - $ - Production /Entertainment Officer 257 366,200 36,600 Retail2 10 6,800 700 Total 778 $ 373,000 $ 37,300 Residential Scenario Resident Production /Entertainment Office 1 Retail 2 Total Status Quo 720 $ - $ - 64 91,200 9,100 15 10,100 1;000 799 $ 101,300 $ 10,100 Resident 107 $ $ Production /Entertainment Office - Retail - Total 107 $ $ ' Assumes $118.75 per space per month ' Assumes $56.25 per space per month; No cha rge for surface parking (26 Spots) ' Assumes additional unpaid visitor parking Source: AECOM AECOM Project No. 11280192.01 Page 17 Table 11: Property Tax and Voter Indebtedness Property Tax Assessments to City of Santa Monica Non - General Funds and Other Taxing Entities Residential Base Proiect Scenario Status Quo Estimated Net New Assessed Value' $169,370,600 $147,058,600 $ 4,371,400 1% P rope rtV Tax Ge ne ral Levy' Santa Monica Community College District 4.26% $ 72,100 $ 62,600 $ 1,860 Santa Monica - Malibu Unified School District 17.22% $ 291,600 $ 253,200 $ 7,527 PropertVTaxes Above 1 %3 Voter Indebtedness City of Santa Monica 0.80% $ 13,500 $ 11,700 $ 349 Metro Water District 0.37% $ 6,300 $ 5,400 $ 162 Community College 8.15% $ 138,100 $ 119,900 $ 3,565 Unified Schools 4.82% $ 81,700 $ 70,900 $ 2,108 1 A estimated in Table 4. 2 Rates were obtained from the Los Angeles County Assessor Rolls '09 3 From tax bill Source: AECOM, Los Angeles County Assessor's Office AECOM Project No. 11280192.01 Page 18 Table 12: Potential Fiscal Revenue Impact on City General Fund Revenues ' Estimated based on actual charges and Consumer Expenditure Study (2009) Source: AECOM Project No. 11280192.01 Page 19 Residential Base Project Scenario Status Quo General Fund Revenues Property Taxes Property Tax-Secured $ 235,900 $ 204,900 $ 6,100 VLF Swap 53,700 46,600 - Sales Taxes On -Site 30,000 48,900 - Off -Site 63,500 69,100 5,300 Other Taxes Utility User Tax 1 232,900 193,200 $17,700 Real Property Tax 40,500 37,300 - Business License Tax 159,100 21,500 800 Vehicle License Fees 2,000 1,900 300 Parking Facility Tax 37,300 10,100 - Licenses /Permits Franchise Tax 12,300 10,200 900 Other 54,400 45,200 3,900 Charges for Service - - - Fines /Forfeitures 31,500 26.100 2,200 Total General Fund Revenues $953,100 $ 715,000 $ 37,200 ' Estimated based on actual charges and Consumer Expenditure Study (2009) Source: AECOM Project No. 11280192.01 Page 19 GENERAL LIMITING CONDITIONS Every reasonable effort has been made to ensure that the data contained in this report are accurate as of the date of this study; however, factors exist that are outside the control of AECOM and that may affect the estimates and/or projections noted herein. This study is based on estimates, assumptions and other information developed by AECOM from its independent research effort, general knowledge of the industry, and information provided by and consultations with the client and the client's representatives. No responsibility is assumed for inaccuracies in reporting by the client, the client's agent and representatives, or any other data source used in preparing or presenting this study. This report is based on information that was current as of July 2012 and AECOM has not undertaken any update of its research effort since such date. Because future events and circumstances, many of which are not known as of the date of this study, may affect the estimates contained therein, no warranty or representation is made by AECOM that any of the projected values or results contained in this study will actually be achieved. 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Our services include Economic Planning and Real Estate, Entertainment and Leisure, Hotels and Resorts and Capital Facilities Planning. The Economics practice at AECOM, formerly ERA, has made important contributions to some of the world's most innovative and successful projects. We fashion project teams with the expertise that precisely suits the challenge at hand. We understand our client's vision — whatever the scope, objective or location —and address your challenges through creative thinking and structured analysis. Economic Planning and Real Estate We understand urban growth and development economics. AECOM helps create the economic and policy framework for urban plans and redevelopment projects, real estate development initiatives, and growth and economic - development strategies. Our work is often concerned with balancing the public sector's policy objectives with the private sector's investment requirements, in the context of a complex public decision - making process. 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AECOM Project No. 11280192.01 Page 21 ATTACHMENT 4 REVISED ECONOMIC IMPACT ANALYSIS NOVEMBER 2012 29 MEMORANDUM TO: Jing Yeo, Special Projects Manager DATE: November 2, 2012 Planning and Community Development City of Santa Monica FROM: Roger Dale, Managing Principal FILE: #3982 The Natelson Dale Group, Inc. (TNDG) SUBJECT: Economic Impact Analysis for Village Trailer Park, LLC Asa supplement to the Fiscal Impact Analysis for the Village Trailer Park project, this memorandum summarizes the broader economic benefits of the project, measured in terms of output (the value of industry production), local jobs and income created. The economic benefits analysis considers the two project alternatives evaluated in the applicant's most recent fiscal revenue analysis. Separate calculations are provided for two categories of benefits: a. Temporary (construction phase) benefits; and b. Permanent benefits associated with the ongoing operation of new businesses within the project area. Consistent with standard practice for these types of impact studies, our analysis considers the direct (i.e., onsite) impacts associated with the proposed Village Trailer Park (VTP) development, as well as "multiplier' impacts within the larger Los Angeles economy (these "indirect" and "induced" impacts are calculated both for the City Santa Monica and County of Los Angeles). These multiplier impacts have been projected using the IMPLAN model. The IMPLAN model was originally developed by researchers at the University of Minnesota and is widely used throughout the United States for economic impact analysis. The model estimates impacts at the city and county levels (based on data that are specific to Los Angeles County). The programmatic data used in the IMPLAN analysis were derived by TNDG from the applicant's pro formas for the two project alternatives. Economic benefits were estimated through the following process. • Construction Phase. Based on data from the developer's pro forma, construction values for each project alternative were matched to appropriate IMPLAN economic sectors, as shown in Appendix Table 1. In addition, the construction period was phased over a three -year development schedule, based on phasing assumptions provided in the pro forma. • Operations Phase. Specific types of tenants are not known forthe commercial components of the project at this time. Thus, TNDG estimated the likely types of tenants that would locate at the project site based on the initial description of the commercial components and the existing breakdown of industry employment in the City. These assumptions are shown on Appendix Table 2. Based on these assumptions and standard employee density factors that were used in the fiscal impact analysis (prepared under separate cover), TNDG derived the estimated number Economic Impact Summary November 2, 2012 Page 2 of employees by economic sector in the IMPLAN model. These estimates of number of employees were then used as inputs in the IMPLAN' model to estimate the ongoing economic impacts associated with commercial components of the project. The project will generate the following types of economic benefits in the regional economy: • Direct Benefits. Direct benefits relate to: a) the short-term business activity of general contractors involved in the project construction, and b) the ongoing business activity of retailers and other firms located within the developed project. Indirect Benefits. Indirect benefits will result when local firms directly impacted by the project in turn purchase materials, supplies or services from otherfirms. An example would include increased sales of building materials as a result of construction activity. Induced Benefits. Induced benefits relate to the consumption spending of employees of firms that are directly or indirectly affected by the project. These would include all of the goods and services normally associated with household consumption (e.g., housing, retail purchases, local services, etc.). The analysis quantifies the above benefits in terms of the following measures: • Total industry output —the increase in gross industry receipts, representing the total economic activity generated by the project; Y Employment — including new full -and part- timejobs;and 4 Employee compensation — Payroll and benefits associated with the created jobs. - The one -time economic benefits associated with the construction phase are summarized for each project alternative in Tables 1 and 2 (pages 4 and 5). As shown in the tables, over the three -year construction phase development of the site would generate between $156.6 million and $178.9 million in one -time total economic activity in the City, depending on the project alternative. For the entire County, the three -year construction phase development of the site would generate between $209.8 million and $240.5 million in one -time total economic activity. Again depending on the project alternative, development of the site would generate between 976 and 1,126 total jobs in the City (jobs lasting the equivalent of one year). Finally, the average employment compensation with these jobs would range from $45,450 to $45,876 in the City. The one -time benefits that would occur in the remainder of the County are also provided in the tables. The permanent benefits associated with the ongoing operation of new businesses within the VTP project area are summarized for each project alternative in Table 3 on page 8. As shown on the table, the developed project would, depending on the alternative, generate between $20.4 million and $425.1 million in total economic activity on a annually- recurring basis'. Again depending on the alternative, the ' The significant range in values among project alternatives is a function of the varying amount of commercial development proposed. Economic Impact Summary November 2, 2012 Page 3 developed project would generate between 130 and 1,287 total new jobs in the City. Finally, the average employment compensation with these jobs would range from $50,000 to $85,973 in the City. The recurring benefits that would occur in the remainder of the County are also provided in the tables. Abbreviated Summary of City and County Employment impacts Summary Tables A and B below provide abbreviated summaries of the construction -phase and permanent /operational employment impacts by alternative. The indicated construction -phase impacts are totals for the assumed three -year construction period. For both the construction and the permanent impacts, the indicated job totals include full- and part -time jobs. The totals include direct (onsite) and indirect /induced (offsite) employment. Tables 1 through 3 provide more detailed summaries of potential economic impacts by alterative. Summary Table A CONSTRUCTION PHASE EMPLOYMENT IMPACTS Village Trailer Park Development Project Alternative Total Construction Phase Jobs Average Annual Pay /Job Santa Monica Other LA County Total Santa Monica Other LA County Base Project 1,126 1 335 1,461 $45,876 $43,209 Residential Alternative 976 291 1,267 $45,450 $43,205 Source: IMPLAN; TNDG. Summary Table B PERMANENT /OPERATIONAL EMPLOYMENT IMPACTS Village Trailer Park Development Project Alternative Total Permanent Jobs Average Annual Pay /Job Santa Monica Other LA County Total Santa Monica Other LA County Base Project 1,287 397 1,684 $85,973 $43,284 Residential Alternative 130 21 151 $50,000 $42,257 Source: IMPLAN; TNDG. Economic Impact Summary November 2, 2012 Page 4 Table 1 Summary of Economic Impacts - Construction Phase Village Trailer Park - BASE SCENARIO Employment (1) City Remainder of County 59.0 7.0 2012 100.7 51.2 331.0 3.0 2013 516.3 144.4 325.0 0.0 2014 509.2 139.3 715.0 10.0 Buildout 1,126.1 334.8 County Total 66.0 Indirect/ 151.8 334.0 Indirect/ 660.6 325.0 Indirectf 648.4 725.0 Indirect( 1,460.9 Impact Category Direct Induced Total Direct Induced Total Direct Induced Total Direct Induced Total output (000s) $80,793 $43,890 $65,520 $41,631 $47,605 $43,775 $42,142 $47,621 $44,124 $45,095 $47,236 $45,876 City $10,249 $5,414 $15,663 $56,864 $25,459 $82,323 $55,642 $25,290 $80,932 $122,755 $56,163 $178,918 Remainder of County $1,528 $7,190 $8,718 $523 $26,347 $26,870 $0 $26,031 $26,031 $2,051 $59,568 $61,619 County Total $11,777 $12,603 $24,381 $57,387 $51,806 $109,193 $55,642 $51,321 $106,963 $124,806 $115,731 $240,537 Employment (1) City Remainder of County 59.0 7.0 41.7 44.2 100.7 51.2 331.0 3.0 185.3 141.4 516.3 144.4 325.0 0.0 184.2 139.3 509.2 139.3 715.0 10.0 411.1 324.8 1,126.1 334.8 County Total 66.0 85.8 151.8 334.0 326.6 660.6 325.0 323.4 648.4 725.0 735.9 1,460.9 Employee Compensation /Job (2) City $80,793 $43,890 $65,520 $41,631 $47,605 $43,775 $42,142 $47,621 $44,124 $45,095 $47,236 $45,876 Remainder of County $79,653 $41,960 $47,115 $11,910 $42,806 $42,164 $0 $42,857 $42,857 $59,330 $42,713 $43,209 County Total _ $80,672 $42,897 $59,316 $41,364 $45,528 $43,423 $42,142 $45,570 $43,852 $45,291 $45,239 $45,265 Notes: "Totals my not sum due to rounding. (1) Inlcudes full-time and part-time jobs. (2) Total payroll cost of the employee paid by the employer. This includes, w age and salary, all benefits (eg, health, retirement, etc) and employer paid payroll. Source: IMPLAN; TNM Economic Impact Summary November 2, 2012 Page 5 Table 2 Summary of Economic Impacts - Construction Phase Village Trailer Park - RESIDENTIAL SCENARIO Employment (1) City 49.0 2012 83.7 281.0 2013 446.6 280.0 2014 445.4 610.0 Buildout 975.8 Remainder of County 6.0 Indirect/ 43.3. 1.0 Indirect( 124.4 0.0 Indirect/ 122.9 7.0 Indirect/ 290.7 Impact Category Direct Induced Total Direct Induced Total Direct Induced Total Direct Induced Total Output (000s) City $8,626 $4,541 $13,167 $49,309 $22,546 $71,855 $49,093 $22,516 $71,609 $107,028 $49,603 $156,631 Remainder of County $1,306 $6,056 $7,362 $92 $22,920 $23,013 $0 $22,865 $22,865 $1,399 $51,841 $53,239 County Total $9,932 $10,597 $20,529 $49,402 $45,466 $94,868 $49,093 $45,381 $94,474 $108,427 $101,444 $209,871 Employment (1) City 49.0 34.7 83.7 281.0 165.6 446.6 280.0 165.4 445.4 610.0 365.8 975.8 Remainder of County 6.0 37.3 43.3. 1.0 123.4 124.4 0.0 122.9 122.9 7.0 283.7 290.7 County Total 55.0 72.1 127.1 282.0 289.0 571.0 280.0 288.3 568.3 617.0 649.4 1,266.4 Employee Com Pens ation /Job (2) City $81,502 $44,148 $66,011 $41,332 $47,149 $43,489 $41,427 $47,148 $43,552 $44,602 $46,864 $45,450 Remainder of County $78,442 $41,814 $46,884 $6,317 $42,674 $42,382 $0 $42,739 $42,739 $68,138 $42,589 $43,205 County Total $80,217 $42,578 $58,922 $41,010 $45,106 $43,087 $41,207 $45,131 $43,201 $44,643 $44,835 $44,742 Notes: 'Totals my not sum due to rounding. (1) Inlcudes full-time and part-time jobs. (2) Total payroll cost of the employee paid by the employer. This includes, wage and salary, all benefits leg, health, retirement, etc) and employer paid payrol]. Source: IMPLAN; TNDG. Economic Impact Summary November 2, 2012 Page 6 Table 3 Summary of Economic Impacts - Ongoing Operations Village Trailer Park Base Alternative Residential Alternative Indirect/ Indirect/ ImpactCategory Direct Induced Total Direct Induced Total output (000s) City Remainder of County County Total Employment (1) City Remainder of County County Total Employee Comoensation/Job (2) City Remainder of County County Total $170,593 $0 $254,473 $67,891 $425,066 $67,891 $8,273 $0 $12,135 $3,510 $20,407 $3,510 $170,593 $322,364 $492,958 $8,273 $15,644 $23,917 412.0 874.9 1,286.9 53.0 76.9 129.9 0.0 396.7 396.7 0.0 21.2 21.2 412.0 1,271.6 1,683.6 53.0 98.2 151.2 $103,538 $77,700 $85,973 $49,759 $50,166 $50,000 $0 $43,284 $43,284 $0 $42,257 $42,257 $103,538 $66,963 $75,914 $49,759 $48,454 $48,912 Notes: "Totals may not sum due to rounding. (1) Includes full -time and part-time jobs. (2) Total payroll cost of the employee paid by the employer. This includes, wage and salary, all benefits (e.g., health, retirement, etc.) and employer paid payroll taxes (e.g. employer side of social security, unemployrcient taxes, etc.). Source: IMPLAN; TNDG. APPENDIX IMPLAN MODEL INPUT DERIVATION TABLES Appendix Table 1 Derivation of IMPLAN Model Inputs - Construction Phase Village Trailer Park Legal/Mktg/Insurance Leasing Commission Lender Fee TOTAL Hard Costs Site Work Residential Commercial Parking TI Allowance Contingency /Other TOTAL 367 360 354 36 37 34 36 36 36 $1,780,000 $1,600,000 $1,745,748 $308,610 $1,002,349 $884,125 $11,885,493 $10,022,901 $1,745,748 $308,610 *IMPLAN Sector Descriptions 369 - Architectural, engineering, and related services 367 - Legal services 2,647,857 2,420,500 27,113,907 30,270,196 7,900,470 1,867,702 12, 910,787 12,558,952 2,275,960 457,200 2,792,892 1,518,614 55,641,873 49,093,164 360 - Real estate 354 - Monetary authorities and depository credit intermediation 37 - Construction of new residential permanent site single -and multi - family structures 36 - Construction of other new nonresidential structures 34- Construction of new nonresidential commercial and health care structures Source: Developer Pro Formas; IMPLAN; TNDG. $2,647,857 $2,420,500 $27,113,907 $30,270,196 $7,900,470 $1,867,702 $12,910,787 $12,558,952 $2,275,960 $457,200 $2,792,892 $1,518,614 55,641,873 49,093,164 CONSTRUCTION VALUES 2012 2013 2014 IMPLAN Residential Residential Residential Category Sector Base Alternative Base Alternative Base Alternative Soft Costs A &E 369 $9,103,144 $7,538,776 Legal/Mktg/Insurance Leasing Commission Lender Fee TOTAL Hard Costs Site Work Residential Commercial Parking TI Allowance Contingency /Other TOTAL 367 360 354 36 37 34 36 36 36 $1,780,000 $1,600,000 $1,745,748 $308,610 $1,002,349 $884,125 $11,885,493 $10,022,901 $1,745,748 $308,610 *IMPLAN Sector Descriptions 369 - Architectural, engineering, and related services 367 - Legal services 2,647,857 2,420,500 27,113,907 30,270,196 7,900,470 1,867,702 12, 910,787 12,558,952 2,275,960 457,200 2,792,892 1,518,614 55,641,873 49,093,164 360 - Real estate 354 - Monetary authorities and depository credit intermediation 37 - Construction of new residential permanent site single -and multi - family structures 36 - Construction of other new nonresidential structures 34- Construction of new nonresidential commercial and health care structures Source: Developer Pro Formas; IMPLAN; TNDG. $2,647,857 $2,420,500 $27,113,907 $30,270,196 $7,900,470 $1,867,702 $12,910,787 $12,558,952 $2,275,960 $457,200 $2,792,892 $1,518,614 55,641,873 49,093,164 Appendix Table 2 Derivation of IMPLAN Model Inputs - Operations Phase Village Trailer Park Retail Office Vacancy Rate Assumption 5.0% 5.0% Occupied Sq. Ft. / Employee 450 250 TOTAL 100.0% 11,710 19,120 25 40 Production /Entertainment Uses SQUARE FEET EMPLOYEES IMPLAN Sector Allocation Residential Residential 80.0% % - Base Alternative Base Alternative Retail Uses 347 Sound recording industries 9.0% 324 Retail Stores - Food and beverage 50.0% 5,855 9,560 12 20 325 Retail Stores- Health and personal care 20.0% 2,342 3,824 5 8 330 Retail Stores- Miscellaneous 30.0% 3,513 5,736 7 12 TOTAL 100.0% 11,710 19,120 25 40 Production /Entertainment Uses 346 Motion picture and video industries 80.0% 81,670 2,992 310 11 347 Sound recording industries 9.0% 9,188 337 35 1 349 Cable and other subscription programming 9.0% 9,188 337 35 1 352 Data processing, hosting, ISP, web search portals & related srvcs. 2.0% 2,042 75 8 0 TOTAL 100.0% 102,088 3,740 388 14 Source: TNDG; IMPLAN. ATTACHMENT REVISED PEER REVIEW OF VALUE ENHANCMENT ANALYSIS NOVEMBER 2012 30 MEMORANDUM TO: ling Yeo, Special Projects Manager DATE: November 2, 2012 Planning and Community Development City of Santa Monica FROM: Roger Dale, Managing Principal FILE: #3982 The Natelson Dale Group, Inc. (TNDG) SUBJECT: Village Trailer Park Project — Peer Review of Applicant's Value Enhancement Analysis Per your request, TNDG has reviewed the Value Enhancement Analysis (VEA) prepared by AECOM and dated October 19, 2012. The VEA calculates the additional development value (defined as the supportable residual land value) that the project would create in comparison to a hypothetical Tier 1 development project on the site. AECOM's memo evaluates two project scenarios for the site: (1) the original proposed project ( "Base Project ") evaluated in the project EIR, and (2) the modified "Residential Scenario" currently under consideration. Summary Conclusions Based on this review, TNDG concurs with AECOM's approach and general conclusions. However, it should be noted that the AECOM analysis utilizes development value and construction cost assumptions that are somewhat different from the assumptions used in the applicant's pro forma for the project. In the interest of providing a consistent set of economic analyses for the project, TNDG has prepared supplemental VEA calculations utilizing value and cost factors from the applicant's pro forma'. For the two project scenarios evaluated by AECOM, TNDG's supplemental results indicate total value enhancements of $26.9 million for the Base FIR project and $12.3 million for the Residential Scenario. These amounts are 189.5% and 688.5% higher than the respective estimates developed by AECOM. Table 1 on the next page summarizes AECOM's estimates of value enhancement by project alternative. Table 2, also on the next page, provides TNDG's supplemental VEA calculations (based on the value and cost assumptions in the applicant's pro forma). ' The main differences are the assumptions regarding: (1) the interest rate for project financing, and (2) the capitalization rates ( "cap rates') used to calculate the project value at buildout. The AECOM analysis assumes an interest rate of 7.00% compared to 6.25% in the applicant's pro forma. For capitalization rates, the AECOM analysis assumes 6.00% for apartments (compared to 5.25% in the applicant's pro forma), 7.00% for office space (compared to 6.75% in the applicant's pro forma), and 8.00% for retail space (compared to 6.75% in the applicant's pro forma). 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Peer Review of VTP Value Enhancement Analysis November 2, 2012 Page 2 :Table 1 ;Calculation of Value Enhancement , i Based on AECOM Value and Cost Factors In thousands of dollars I Tables 3 and 4, on the next page, compare the AECOM and TNDG calculations for the Base Project and the Residential Scenario. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596. Fax: (714) 692 -9597 Base R Residential Tier 1 P Project S Scenario Total Value ? ? j Condominiums ( $ $ 5 55,867 j $ 8 88,741 $ $ 89,413 Apartments $ $ 1 19,495 { ' $ 3 30,965 $ $ 40,075 Commercial $ $ 2 27,699 [ $ 4 44,000 $ $ 12,540 Total 1 103,061 E $ 1 163,706 $ $ 142,028 L Less:Total Construction Cost I I C $ ( (85,977). $ (137,340) $ $ (123,382) Residual Value $ $ 1 17,084 $ 2 26,366 $ $ 18,646 Value Enhancement (over Tier 1 1)j $ $ $ 9 9,282 $ $ 1,562 Table 2 Calculation of Value Enhancement Based on Value and Cost Factors from Applicant's Pro Forma In thousands of dollars; I Base R Residential Tier 1 P Project S Scenario Total Value 'Condominiums $ $ 5 55,867 ( $ 9 91,581 $ $ 90,026 ;Apartments j j.$ 1 19,495E $ 3 35,723 $ $ 51,965. Commercial I $ $ 2 27,699 $ 5 55,953 $ $ 12,762 Total I $ $ 1 103,061 + j $ 1 183,257 $ $ 154,754 Less:Total Construction Cost ' ' :$ ( (85,977)1 $ (139,298), $ $ (125,354) Residual Value '. i i $ 1 17,084 j $ 4 43,959 $ $ 29,399 Value Enhancement ment (over Tier l)! $ $ $ 2 26,875 $ $ ..12,315 Tables 3 and 4, on the next page, compare the AECOM and TNDG calculations for the Base Project and the Residential Scenario. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596. Fax: (714) 692 -9597 Peer Review of VTP Value Enhancement Analysis November 2, 2012 Page 3 ;Table 3 1 ; ;Comparison of VEA for Base Project 'AECOM and TNDG Calculations I In thousands of dollars I I � Residential Scenario j Base [ 1 Base ( j 5 Project ` = Project Percentage j (AECOM) (. , (TNDG). Difference .Total Value $ 90,026 0.7 %'', ;Apartments 5 1. Condominiums ( $ 88,741 i j $ 91,581 3.2% Apartments i $ 30,965 1 : $ 35,723 154% ,Commercial $ 44,000 j $ 55,953 .272 %5 .Total ) $ 163,706 '', $ 183,257 i 11.9% (Less: Total Construction Cost $ (137,340); ; $ (139,298) 1.4 %! ' S Residual Value $ 26366.; $ 43,959 66.7%j Enhancemenover Tier Value t ( _ 1) � $ 9,282 i $ ..26,875189.5%; Table 4 i iComparison of VEA for Residential Scenario AECOM and TNDG Calculations In thousands of dollars Less: Total Construction Cost Residual Value Value Enhancement (over Tier $ 18,646 $ 29,399 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Residential Residential Scenario Scenario Percentage (AECOM)..i (TNDG) Difference Total Value :Condominiums _. 5_$ 89,413 $ 90,026 0.7 %'', ;Apartments 5 } $ 40,075 j $ 51,965 29.7%'. ; Co m m e raa1 i t I $ 12,540 ( $ 12,762 _ 1.8% Total $ 142,028 $ 154,754 9.0% Less: Total Construction Cost Residual Value Value Enhancement (over Tier $ 18,646 $ 29,399 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Peer Review of VTP Value Enhancement Analysis November 2, 2012 Page 4 For the Base Project, TNDG's analysis (based on the applicant's pro forma assumptions) indicates a total development value that is approximately 11.9% higher than the AECOM estimate. TNDG's costs are about 1.4% higher than the AECOM estimates. For the Residential Scenario, TNDG's analysis (based on the applicant's pro forma assumptions) indicates a total development value that is approximately 9.0% higher than the AECOM estimate. TNDG's costs are about 1.6% higher than the AECOM estimates. Given the somewhat theoretical and speculative nature of value enhancement analyses, TNDG believes that these are relatively minor differences which do not materially alter the bottom -line conclusions of the analysis (which is primarily intended to compare the relative value enhancement potentials of the different project scenarios). Please feel free to contact us if you have any questions or would like to discuss this memo further. Roger A. Dale, Managing Principal 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Memorandum AECOM 213 593 8520 tat 515 S. Flower Street, 9" Street 310 593 7715 fax Los Angeles, CA 90071 www.aecom.com To Village Trailer Park, LLC Pages 1 of 11 cc Subject Value Enhancement Analysis of Village Trailer Park From AECOM Date October 19, 2012 Introduction Village Trailer Park, LLC (Client) retained the Economics practice at AECOM (AECOM) to conduct a value enhancement analysis for the proposed redevelopment of the Village Trailer Park (Base Project)'. The Base Project is a transit - oriented, mixed -use village comprised of entertainment/production office, residential and retail uses, as well as public open space amenities on approximately 4 acres (Project Site) located in the City of Santa Monica (City). The Project Site is located near the intersection of Colorado Avenue and Stanford Street in proximity to the future Expo Light -Rail station in the City. The purpose of this analysis is to estimate the incremental value of the density that exceeds the allowable density under a Tier 1 project, which is a floor area ratio (FAR) of 1.5. The following summarizes the projects under evaluation in this analysis: The Base Project (2.38 FAR) consists of approximately 102,100 leasable square feet of entertainment/production office uses, 11,700 leasable square feet of retail space, and 393 residential Lin its2. In total the project includes approximately 399,600 gross square feet of building area. The alternative (Residential Scenario) development (2.03 FAR) consists of approximately 3,700 leasable square feet of entertainment/production office uses, 19,000 leasable square feet of retail space, and 377 residential units3. In total the project includes approximately 341,300 gross square feet of building area. The Tier 1 development (1.50 FAR) consists of approximately 64,300 leasable square feet of entertainment/production office uses, 7,400 leasable square feet of retail space, and 247 residential units ". In total the project will include approximately 251,600 gross square feet of building area. A detailed summary of this information is presented in Appendix Table 1. ' As presented in the Environmental Impact Statement. I Includes 52 affordable units. 3 Includes 16 affordable units. 4 Includes 33 affordable units. AECOM Project No. 60223564 Page 1 Value Enhancement Analysis Revenue Assumptions The following presents our assumptions regarding the revenues. The assumptions developed herein do not rely on a market study and present general assumptions about the project at buildout under a future year of stabilized operations. These assumptions are consistent with a fiscal impact analysis previously delivered to the Clients. All assumptions are also documented in Appendix Table 2 and 3. For -Sale Residential AECOM has assumed a sales price of $6256 per net square foot with sales of 100 percent of the units upon project stabilization. To estimate the for -sale residential value we have also assumed that marketing and sales costs will represent 8 percent of the sales value. For -Rent Residential AECOM has assumed that the average rent for market rate units will be $3.757 per net square foot with a stabilized vacancy rate of 5 percent. For affordable units, AECOM has assumed an average rent price of $2.878 per net square foot in the Base Project and an average rent price of $1.229 per net square foot in the Residential Scenario with the same structural vacancy rate. Operating expenses for all units were estimated at 38 percent of the effective gross income. To determine the terminal value of the for -rent residential units we have utilized a capitalization rate of 6.0 percent70. Production /Entertainment Office AECOM has assumed that the average production /entertainment office rents were $3.50" (full service gross or FSG) per net square foot with a stabilized vacancy rate of 10 percent. Operating expenses were estimated at 25 percent of the effective gross income. To determine the terminal value of the production /entertainment office space we have utilized a capitalization rate of 8.00 12 percent. Retail AECOM has assumed that the average retail rents were $3.75t3 (Triple net or NNN) per net square foot with a stabilized vacancy rate of 5 percent. The majority of operating expenses are assumed to be recovered by the rent structure with 3.5 percent of income going towards marketing and management expenses. To determine the terminal value of the retail space we have utilized a capitalization rate of 7.00'" percent. Parking Income Parking income was evaluated using the assumption that designated office parking spaces would yield approximately $119 per space per month and designated retail parking spaces would yield approximately $56 per space per month. We have not assumed any revenue associated with surface ' Please refer to the Fiscal Impact Analysis 6 Estimate based on comparables Client target average rent per unit e FY2010 HUD guidelines for affordable housing in Los Angeles County ' 2012 guidelines for affordable housing in the City of Santa Monica for "Low Income' households (80% income) 10 12 month rolling average cap rate for apartments in the Los Angeles Market (REIS Q2 2012) '1 Class A(B office rent estimate in Santa Monica market ( Costar Q2 2012) '2 12 month rolling average cap rate for office in the Los Angeles Market (REIS Q2 2012) " Estimate based on discounted total average retail rents in Santa Monica market (Costar Q2 2012) " 12 month rolling average cap rate for retail in the Los Angeles Market (REIS Q2 2012) AECOM Project No. 11280192.02 Page 2 parking or parking associated with the for -sale or for -rent residential units. Operating costs were estimated at $350 per space per year. Construction Cost Assumptions The following presents our assumptions regarding the development costs. All assumptions are also presented in Appendix Table 4. Hard Construction Costs The following outline our key assumption regarding the project's hard costs: • AECOM assumed a base hard cost of $135 per gross square foot for the production /entertainment office and retail space. • Tenant improvements were estimated at $40 per net square foot. • For -sale residential and for -rent residential costs were estimated at $190 and $180 per square foot, respectively. • For the Tier 1 development, we adjusted shell costs down to 95 percent to account for a wood versus steel based construction typology. • Parking costs were estimated at $3,500 per surface space and $32,500 per subterranean space. Soft Construction Costs The following outline our key assumption regarding the project's soft costs. • Architecture and Engineering costs are estimated at 6.0 percent of the hard costs. • Public permits and fees are estimated at $15.00 per gross square foot. • Marketing and leasing costs for the commercial space are estimated at $6.00 per gross square foot. • Contingency costs are estimated at 5.0 percent of the hard costs. • The developer's fee is estimated at 3.0 percent of the hard costs. • Taxes and insurance costs are estimated at 2.0 percent of the hard costs. Y Construction interest was estimated at 7.0 percent over an assumed 18 month construction period with 65% average outstanding balance. Estimated Residual Value and Value Enhancement Based on our analysis of the proposed project's revenues and costs in a static pro forma, we have estimated that the residual value (project's assumed sales value less the cost of construction, not including the cost of the land) ranges from between $26.4 to $18.6 million. Our analysis suggests that the range of value enhancement over the allowable Tier 1 density is $9.3 million for the Base Project and $1.6 million for the Residential Scenario. AECOM Project No. 11280192.02 Page 3 Res i denti a I Tier Base Project Scenario Total Value Residential Commercial $ 55,867,000 $ 88,741,360 $ 89,412,960 $ 47,194,000 $ 74,965,000 $ 52,615,000 Total Value $ 103,061,000 $ 163,706,360 $ 142,027,960 Less Total Construction Cost $ (85,977,000) $ (137,340,000) $ (123,382,000) Residual Value $ 17,084,000 $ 26,366,360 $ 18,645,960 Value Enhancement (over Tier 1) S - $ 9,282,360 $ 1,561,960 Source: AECOM It is important to note that this analysis does not include the developer's required return on investment (profit) that will decrease the amount that he or she is willing to theoretically pay for the land and associated development rights. Furthermore, the model is highly sensitive to key revenue and cost assumptions. As such, minor changes on either the revenue or cost side could change the potential incremental value enhancement significantly. AECOM Project No. 11280192.02 Page 4 Appendix Tables Appendix Table 1 - Project Description Residential Project Description Assumptions Tier Base Project Scenario Site Area (SF) 167,706 167,706 167,706 Gross Building Area (SF) 251,559 399,581 341,280 Retail 8,210 13,040 20,700 Production /Enterta i nment Offi ce 69,297 110,073 4,250 Residential 174,052 276,467 316,350 For -Sale 100,534 159,690 195,180 For -Rent 73,518 116,778 121,170 Floor Area Ratio (FAR) 1.50 2.38 2.03 Net Buildable Area (SF) 217,268 345,113 277,260 Retail - 7,372 11,710 19,120 P rod ucti on/En terta i nment Off! cc 64,270 102,088 3,740 Residential 145,626 231,315 254,400 For -Sale 84,115 133,609 155,500 For -Rent 61,511 97,706 98,900 Parking Ground (Spaces) 15 15 15 Subterranean (Spaces) 490 _ 778 799 Total (Spaces) 505 793 814 Construction Time (Months) 18 18 18 Source: AECOM AECOM Project No. 11280192.02 Page 5 Appendix Table 2 — For -Sale Residential Revenue Assumptions Alternative Revenue Ass umpti ons Tier Base Project Scenario For -Sale Residential Value Net Square Feet (NSF) 97,161 154,332 155,500 Vacancy 0% 0% 0% Sales Price Per Square Foot (SF) $ 625 $ 625 $ 625 Value (Rounded) $ 60,725,000 $ 96,458,000 $ 97,188,000 Less Cost of Sales/Marketing ( @8 %.of Value) $ (4,858,000) $ (7,716,640) $ (7,775,040) Value (Rounded) $ 55,867,000 $ 88,741,360 $ 89,412,960 Source: AECOM AECOM - Project No. 11250192.02 Page 6 •u Appendix Table 3 — For -Rent Commercial Revenue Assumptions For -Rent Residential (Affordable) NSF Average Rent SF /Mo. Occupancy EGI Operating Expenses /Ratio (38 %) NOI Cap Rate Value (Rounded) Value per $NSF Source: AECOM 14,152 22,479 9,050 Alternative Revenue Assumptions 2.87 Tier Base Project Scenario For -Rent Residential (Market) 95% $ 463,019 $ 735,468 NSF $ (173,720) 34,313 54,504 89,850 Average Rent SF /Mo. $ 3.75 $ 3.75 $ 3.75 Occupancy 6.00% 95% 95% 95% Effective Gross Income(EGI) $ 1,466,897 $ 2,330,046 $ 3,841,088 Operating Expenses /Ratio (38 %) $ (550,364) $ (874,209) $ (1,441,135) Net Operating Income(NOI) $ 916,533 $ 1,455,837 $ 2,399,952 Capitalization Rate (Cap Rate) 6.00% 6.009/ 6.00% Value (Rounded) $ 15,276,000 $, 24,264,000 $ 39,999,000 Value per$NSF $ 445 $ 445 $ 445 For -Rent Residential (Affordable) NSF Average Rent SF /Mo. Occupancy EGI Operating Expenses /Ratio (38 %) NOI Cap Rate Value (Rounded) Value per $NSF Source: AECOM 14,152 22,479 9,050 $ 2.87 $ 2.87 $ 1.22 95% 95% 95% $ 463,019 $ 735,468 $ 126,232 $ (173,720) $ (275,940) $ (47,361) $ 289,299 $ 459,528 $ 78,871 6.00% 6.00% 6.00% $ 4,822,000 $ 7,659,000 $ 1,315,000 S 341 S 341 S 145 AECOM Project No. 11280192.02 Page 7 r` 0 T Appendix Table 4— Retail /Office Commercial Revenue Assumptions (Continued) Revenue Assumptions Reta i I NSF Average Rent SF /Mo. (Tri p e Net) Occupancy Parking (less taxes and operating costs i) EGI Operating Expenses /Ratio (3.5 %) NOI Cap Rate Value (Rounded) Value per $NSF =3.0% .. . - : . .-. Average Rent SF /Mo. (Full Service Gross i) Occupancy Parking (less taxes and operating costs') EGI Operating Expenses /Ratio (25 %) NOI Cap Rate Value(Rounded) Value per $NSF Alternative Tier) Base Project Scenario 7,372 $ 11,710 19,120 $ 3.75 $ 3.75 $ 175 95% 95% 95% $ 1,545 $ 2,575 $ 16,411 $ 316,703 $ 503,178 $ 833,791 5 (11.085) 5 (17.611) 5 129.183) $ 305,618 $ 485,566 $ 804,609 7.00% $ 52,615,000 7.00% 7.00% $4,366,000 $6,937,000 $11,494,000 $ 592 $ 592 $ 601 64,270 102,088 3,740 $ 3.50 $ 3.50 $ 3.50 90% 90% 90% $ 150,875 $ 239,653 $ 11,625 $ 2,580,289 $ 4,098,579 $ 152,997 $ (645,072) $ (1,024,645) $ (38,249) $ 1,935,217 $ 3,073,934 $ 114,748 8.00% 8.00% 8.00% $ 24,190,000 $ 38,424,000 $ 1,434,000 $ 376 $ 376 $ 383 Commercial Terminal Value (Rounded) NOI $ 3,447,000 $ 5,475,000 $ 3,398,000 Cap Rate 7.1% 7.1% 6.3% Commercial Sales Value $ 48,654,000 $ 77,284,000 $ 54,242,000 Less Cost of Sales( @3 %of Sales Value) $ (1,460,000) $ (2,319,000) $ (1,627,000) Terminal Value (Rounded) $ 47,194,000 $ 74,965,000 $ 52,615,000 1 Parking tax at 10 percent gross revenue and operating costs estimated at $350 per space per year Source: AECOM AECOM Project No. 11280192.02 Page 8 FAIERS Appendix Table 5 — Development Costs Development Costs Assumptions Tier Base Project Residential Scenario Site Development On -Site improvements /Demo $ 25.00 /SF Site Development Costs (1) $ 4,192,650 $ 4,192,650 $ 4,192,650 Hard Costs Retail /Office Shell@ $ 135 /GSF $ 9,940,269 $ 16,620,325 $ 3,368,250 Retail Tenant Improvements @ $ 40 /NSF $ 294,884 $ 468,400 $ 764,800 Prod /Ent. Office Tenant Improvements $ 40 /NSF $ 2,570,808 $ 4,083,520 $ 149,600 For -Sale Residential @ $ 190- /GSF $ 18,820,644 $ 30,341,075 $ 37,084,200 For -Rent Residential @ $ 180 /GSF $ 13,038,740 $ 21,019,970 $ 21,810,600 Parking Surface $ 3,500 /Space $ 52,500 $ 52,500 $ 52,500 Subterranean $ 32,500 /Space $ 15,918,348 $ 25,285,000 $ 25,967,500 Sub- Total(2) $ 60,636,193 $ 97,870,790 $ 89,197,450 Total Hard Costs (3)= (1) +(2) $ 64,828,843 $ 102,063,440 $ 93,390,100 Total Hard Costs ($ per GSF) $ 258 $ 255 $ 274 Soft Costs A &E 6.00% of (3) $ 3,889,731 $ 6,123,806 $ 5,603,406 Public Permits and Fees $15.00 /GSF $ 3,773,385 $ 5,993,715 $ 5,119,200 Marketing Leasing Commission $6.00 /GSF $ 1,509,354 $ 2,397,486 $ 2,047,680 Contingency 5.00% of (3) $ 3,241,442 $ 5,103,172 $ 4,669,505 Developer's Fee 3.00% of (3) $ 1,944,865 $ 3,061,903 $ 2,801,703 Taxes / Insurance 2.00% of (3) $ 1,296,577 $ 2,041,269 $ 1,867,802 Sub -Total (4) $ 15,655,354 $ 24,721,351 $ 22,109,296 Construction Financing - Term of Loan (months) 18 Average Balance Drawn 65.00% Construction Interest 7.00% Loan Fees 1.50% Sub -Total (5) of (3) +(4) $ 5,493,046 $ 10,554,834 $ 7,882,834 Total Soft Costs(6)= (4) +(5) $ 21,148,400 $ 35,276,185 $ 29,992,130 Total Soft Costs ($ per GSF) $ 84 $ 88 $ 88 Total Development Costs IRoundedl Total (7)= (3) +(6) $ 85,977,000 $ 137,340,000 $ 123,382,000 Total ($ per GSF) $ 342 $ 344 $ 362 'Assumes retail /office shell and residential exteriorhard costs are95 %of assumed cost Source: AECOM AECOM Project No. 11280192.02 Page 9 Every reasonable effort has been made to ensure that the data contained in this report are accurate as of the date of this study; however, factors exist that are outside the control of AECOM and that may affect the estimates and/or projections noted herein. This study is based on estimates, assumptions and other information developed by AECOM from its independent research effort, general knowledge of the industry, and information provided by and consultations with the client and the client's representatives. No responsibility is assumed for inaccuracies in reporting by the client, the client's agent and representatives, or any other data source used in preparing or presenting this study. This report is based on information that was current as of July 2012 and AECOM has not undertaken any update of its research effort since such date. Because future events and circumstances, many of which are not known as of the date of this study, may affect the estimates contained therein, no warranty or representation is made by AECOM that any of the projected values or results contained in this study will actually be achieved. 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Our services include Economic Planning and Real Estate, Entertainment and Leisure, Hotels and Resorts and Capital Facilities Planning. The Economics practice at AECOM, formerly ERA, has made important contributions to some of the world's most innovative and successful projects. We fashion project teams with the expertise that precisely suits the challenge at hand. We understand our client's vision — whatever the scope, objective or location —and address your challenges through creative thinking and structured analysis. Economic Planning and Real Estate We understand urban growth and development economics. AECOM helps create the economic and policy framework for urban plans and redevelopment projects, real estate development initiatives, and growth and economic - development strategies. Our work is often concerned with balancing the public sector's policy objectives with the private sector's investment requirements, in the context of a complex public decision - making process. In real estate, we work with clients in complex settings to enable them to invest in, develop, and manage profitable real estate ventures. Development firms, financial institutions, investors, and corporations, educational institutions, and public entities, rely on our advice and counsel. AECOM AECOM is a global provider of professional technical and management support services to a broad range of markets, including transportation, facilities, environmental, energy, water and government. With approximately 50,000 employees around the world, AECOM is a leader in all of the key markets that it serves. AECOM provides a blend of global reach, local knowledge, innovation, and technical excellence in delivering solutions that enhance and sustain the world's built, natural, and social environments. A Fortune 500 company, AECOM serves clients in more than 100 countries and had revenues in excess of $6 billion. AECOM Project No. 11280192.02 Page 11 ATTACHMENT REVISED PEER REVIEW OF PRO FORMA NOVEMBER 2012 31 MEMORANDUM TO: ling Yeo, Special Projects Manager DATE: November 6, 2012 Planning and Community Development City of Santa Monica FROM: Roger Dale, Managing Principal FILE: #3982 The Natelson Dale Group, Inc. (TNDG) SUBJECT: Village Trailer Park Project — Peer Review of Applicant's Revised Financial Pro Forma Overview of Updated Peer Review Per your request, TNDG has reviewed the latest version of the "Village Trailer Park Pro Forma" (Pro Forma Report) prepared by The Luzzatto Company and dated October 23, 2012 (and slightly modified on November 5, 2012). The revised pro forma evaluates the "Increased Residential Alternative" that will be considered at the November 13 City Council hearing forthe project In addition to revising the land use mix to reflect the updated project description, the applicant has modified several variable assumptions in the pro forma. Compared to earlier versions of the pro forma, the most significant changes are as follows: Development Cost Factors 1. Given that the modified development concept would preserve a portion of the existing trailer park on the site, the revised development cost estimates include $730,000 for "trailer park upgrades." This amount is based on a detailed bid provided to the applicant by Benchmark Contractors, Inc. We have not independently reviewed this bid. 2. The revised pro forma includes public benefits costs of $2,229,000, including the following components: Transportation Impact Fee $ 1,650,000 TMA Fee 50,000 Contribution for Senior and Disabled Services $ 350,000 Child Care Subsidy Above Linkage Fee $ 179,000 Per the applicant, the above estimates are derived directly from the proposed development agreement for the project. 3. The current version of the pro forma assumes a construction loan interest rate of 6.25% compared to 5.75% in the previous (July 14, 2012) version. This factor is discussed further below. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Peer Review of VTP Pro Forma November 6, 2012 Page 2 Development Value Factors 4. The capitalization rate ( "cap rate') used to calculate the development value at buildout has been changed to 5.25% for the apartment component of the project (compared to 5.75 %) in the previous version of the pro forma. The cap rate for commercial development remains unchanged at 6.75 %. The effect of the cap rate assumptions is discussed further below. The developer's earlier pro forma reports for the project (submitted for the previous Planning Commission and City hearings) were peer reviewed in detail in separate memoranda dated May 2, 2012 and July 17, 2012. This updated memorandum is intended to supplement, not replace, TNDG's previous peer reviews. In particular, the updated memorandum focuses primarily on the revised assumptions and conclusions of the Pro Forma Report. TNDG's comments on the earlier versions of the pro forma are not repeated here, with the exception of several key concluding remarks which are still applicable. Applicant's Conclusions Regarding Feasibility of Modified Project Consistent with the original Pro Forma Report, the revised analysis measures financial feasibility in terms of "developer yield," a simple percentage calculated by dividing total developer profit (over the life of the project) by the total project value (calculated based on an assumed sale of the project after full build -out and operational stabilization). The pro forma also measures the project's profitability in terms of an internal rate of return (IRR). TNDG believes that the IRR is a more meaningful measure of project feasibility since it more explicitly takes into account the timing of project cash flows. The applicant's projections of developer yield and IRR for the current Increased Residential Scenario are shown below. For comparison purposes, the yield and IRR for the original "Base Project" are also shown. ' The indicated yield and IRR are based on the original land use assumptions for this alternative, but reflect the revised interest rate and capitalization rate factors in the applicant's latest pro forma. z The applicant's spreadsheet provides several different calculations of the IRR for each project scenario. TNDG's summary table uses the "leveraged" IRR projection for each scenario 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692 -9596 . Fax: (714) 692 -9597 Original Increased Base Residential Project Scenario Profitability Measure (7- 14 -12)' (10- 23 -12) Developer Yield 13.61% 5.20% Internal Rate of Return (IRR )2 7.09% 3.02% ' The indicated yield and IRR are based on the original land use assumptions for this alternative, but reflect the revised interest rate and capitalization rate factors in the applicant's latest pro forma. z The applicant's spreadsheet provides several different calculations of the IRR for each project scenario. TNDG's summary table uses the "leveraged" IRR projection for each scenario 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692 -9596 . Fax: (714) 692 -9597 Peer Review of VTP Pro Forma November 6, 2012 Page 3 Peer Review of Interest Rate and Cap Rate Assumptions In requesting that the applicant provide additional documentation of several key assumptions in the revised pro forma, TNDG raised the issue that the current model assumes an interest rate of 6.25% compared to 5.75% in the July 14 version, despite recent decreases in interest rates and the LIBOR index. The applicant has indicated that by the time they are ready to secure a construction loan, the stabilizing economy will be accompanied by increases in interest rates — and this can happen quickly. In response to this issue, the applicant provided a memo (see Attachment A) from Chris Vittetoe of mortgage brokers HHF in which he expressed the opinion that with the project's current mix of condos and apartments, construction loans would be in the 6% to 6.5% range, (in loans from two separate entities, since the banks will lend on the apartments but not on condos). Rapidly rising post- recession interest rates are even more anticipatable when rates have been very low, as has been the case for 2012 and the last few years. The argument for potentially rapid changes in interest rates, following periods when rates had significantly declined, is supported by an examination of long -term trends in the LIBOR rate (for 6 -month loans), as shown on Figure 1. The chart shows that, for example, from the first quarter of 2004 to the middle of 2006 the LIBOR rate increased by approximately 4.25 percentage points, from a little over 1 percent to roughly 5.5 %. Reductions in the rates can be similarly volatile.' Based on all these considerations, the applicant's assumed interest rate seems reasonable. In any event, the assumed rate change does not greatly change the project's overall performance. The project's IRR using the two interest rates varies from 3.02% (leveraged) at the 6.25% rate to 3.34% at the 5.75% rate. The difference in net proceeds is a negative $819,000 using the current higher interest rate compared to the lower. Rising interest rates, to the extent they occur, would be accompanied by increases in the capitalization (cap) rates that represent the theoretical yields from investing in a real estate product. In the current model, the applicant is showing a lower cap rate forthe apartment component of the project than applied in the July version: 5.25% currently compared to 5.75% in July. The lower cap rate results in an increased (modeled) income from the sale of apartments in the project. Based on the continuing evidence of low cap rates in the Santa Monica apartment market (and elsewhere) the applicant determined that, even projecting future interest rate increases, a lower cap rate than they applied in the July model was a more realistic assumption, and we would agree. The project's IRR using the two cap rates varies from 3.02% (leveraged,) at the 5.25% cap rate to 1.37% at 5.75 %. The difference in net proceeds is a positive $4.3 million using the currently modeled lower cap rate compared to the previous rate. ' Recent revelations have called into question LIBOR rate - setting practices during the recession, but the trends of volatility are evident through the entire time period shown on the figure. 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Peer Review of VTP Pro Forma November 6, 2012 Page 4 Figure 1. (Note that this chart is taken directly from the Web -based source shown, the Netherlands - based organization HomeFinance) pba Summary Conclusions and TNDG Comment on Project Feasibility The applicant's pro forma analysis provides a thorough basis for understanding the relative financial feasibility of the Increased Residential Scenario. Based on the above yields and IRR's, TNDG would characterize the original Base Project as feasible and the Increased Residential Scenario as marginally feasible. Although the indicated yield and IRR for the Increased Residential Scenario are not indicative of what would normally be considered a highly profitable project, there are other aspects of potential profitability within the pro forma figures that are not necessarily represented in the IRR numbers. These factors, which may make the project an attractive and feasible investment for the applicant despite the relatively low yields and IRR's, include the following: 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92.887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 Peer Review of VTP Pro Forma November 6, 2012 Page 5 • The project costs include a standard developer's fee of 3.0% ($4.1 million for the Increased Residential Scenario), which appears reasonable and consistent with industry standards. At present, both interest rates and cap rates are lower than assumed in the applicant's pro forma. We concur that the applicant's assumptions of future increases in these factors are appropriate, given the anticipation of an improving economy. However, should interest and /or cap rates remain below the levels assumed by the applicant, the project's profitability could improve significantly. o TNDG' ssubcontractorforthisassignment — RRMDesignGroup — previously reviewed the construction cost factors in the applicant's pro forma and concluded that they are reasonable. However, it TNDG's understanding that the applicant's cost estimates are based on a single bid for the original Base Project. It is therefore possible that actual construction costs, resulting from a competitive bidding process at the time the project is ready to proceed, would be lower and thereby increase the project's profitability. • The applicant's latest pro forma for the Increased Residential Scenario assumes the same number of underground parking spaces (821 spaces) as the previous (July 2012) version of the increased residential scenario, even though residential development has been reduced by 61 units and commercial development has been reduced by approximately 6,000 square feet. To the extent that the underground parking could be reconfigured to allow for fewer spaces to be developed (TNDG has not evaluated the feasibility of such a reconfiguration), the overall profitability of the project could increase significantly. The land costs for the site are somewhat indeterminate and may or may not represent an element of profitability, depending on details of the deal structuring. The pro forma (for all alternatives) assumes a land cost of $22 million. This is an estimate and not based on an actual transaction. According to the applicant, a substantial part of the property is owned by individuals who have held the property for decades. As such, the low cost basis for these landowners may motivate them to pursue the project despite the apparent low rate of profitability. This may especially be the case in a low interest rate environment in which relatively less risky investments (compared to real estate) offer very low rates of return. As noted in our previous memoranda, the indicated yields and IRR's in the applicant's pro forma are highly sensitive to variations in key revenue assumptions. In other words, relatively modest changes in the assumed revenue potentials or development costs could significantly affect the profitability of the project. Please feel free to contact us if you have any questions or would like to discuss this memo further. Roger A. Dale, Managing Principal 24835 E. La Palma Avenue, Suite I, Yorba Linda, California 92887 Phone: (714) 692-9596 . Fax: (714) 692 -9597 ATTACHMENT A: MEMORANDUM FROM APPLICANT'S MORTGAGE BROKER [MIDI MEMORANDUM DATE: November 6, 2012 TO: Ron Harari Vice President The Luzzatto Company FROM: Chris Vittetoe RE: CONSTRUCTION LOANS Ron, Per our conversation and based on the current mix of condos and apartments, it is my opinion the current debt markets would blend to 6% -6.50% debt. In fact, it will likely result in two separate loans —one loan for the apartments at the aforementioned rates and another loan for condo inventor}. The banks are not in position to lend on condos at this point in the cycle. However, debt funds would take the risk but would need to be compensated. Please feel free to call or email me should you have any questions. Warm regards, Chris Vittetoe HFF Director —CA Lic. #01807651 1999 Avenue of the Stars, Suite 120 Los Angeles, CA 90067 cvittetoeQhfflp.com 1999 Avenue of the Stars, Suite 1200 ■ Los Angeles, California 90067 ■ 310.407.2100 ■ 310.407.2101 (fax) VTP Pro Forma - Increased Residential Alternative - Revised October 23, 2012 $ /gsf Gross Rental Income Land Cost $ 22,000,000 $ 64 Apartments $ 4,188,540 Commercial $ 1,028,700 Hard Costs Rental Increase /Other $ 235,527 Site Work $ 4,840,999 $ 14 Reimbursable Expenses $ - Residential $ 60,540,392 $ 177 Less: Vacancy /Structural Reserves $ (327,166) Commercial $ 3,735,403 $ 11 Total Rental Income $ 5,125,601 Parking $ 25,117,905 $ 74 Less: Operating Expenses $ (1,509,252) TI Allowance $ 914,400 $ 3 Net Operating Income $ 3,616,349 Contingency /Other $ 3,037,228 $ 9 Total Hard Costs $ 98,186,328 $ 288 Cap Rate at Stabilization 5.54% Gross Value of Apartment and Commercial $ 65,243,256 Soft Costs Less Closing Costs $ (1,957,298) A&E $ 7,538,776 $ 22 Net Sales Value $ 63,285,958 Legal /Mktg /Insurance $ 1,600,000 $ 5 Plus Cash Flow through Stabilization $ 1,446,864 Property Taxes $ 2,277,934 $ 7 Net Value of Apartments and Commercial $ 64,732,822 City Fees $ 2,445,576 $ 7 Trailer Park Upgrades $ 730,000 $ 2 Condominiums Public Benefits $ 2,229,000 $ 7 Total Sales Price $ 101,075,000 Leasing Commission $ 308,610 $ 1 Less Sales and Marketing $ (8,086,000) Developer Fee $ 4,081,973 $ 12 Less Other $ (2,956,461) Lender Fee $ 882,721 $ 3 Net Condominium Sales $ 90,032,539 Interest $ 3,952,062 $ 12 Contingency /Other $ 887,173 $ 3 Total Project Value $ 154,765,361 Total Soft Costs $ 26,933,825 $ 79 7,645,209 $ 431 Total Pro'ect Costs $ 147,120,152 Devioper Profit $ Developer Yield 5.20% Developer IRR 3.02% ATTACHMENT 7 PROJECT PLANS On file with City Clerk and available electronically at: http://www.sm-gov.net/departments/clerk/agendas.asp W ATTACHMENT RECIRCULATED PORTIONS OF THE FEIR, PUBLIC COMMENTS AND AGENCY RESPONSE NOVEMBER 2012 On file with City Clerk and available electronically at: http://www.smqov.net/departments/clerk/agendas.asp 33 ATTACHMENT 11 DRAFT ORDINANCE F City Council Meeting 11 -13 -12 Santa Monica, California ORDINANCE NUMBER (CCS) (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA APPROVING THE DEVELOPMENT AGREEMENT BETWEEN THE CITY OF SANTA MONICA, A MUNICIPAL CORPORATION, VILLAGE TRAILER PARK LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, AND VILLAGE TRAILER PARK INC.. A CALIFORNIA CORPORATION WHEREAS, on June 25, 2007, Village Trailer Park LLC, a California Limited Liability Company, hereinafter "Developer," submitted an application for a development agreement for a mixed -use project that will include a mixed -use project consisting of 438 residential units, up to 5,080 square feet of ground floor creative office, and 20,860 square feet of ground floor neighborhood- serving retail; and WHEREAS, on August 13, 2012, Developer submitted revisions to the proposed mixed -use project, so that it will include 377 residential units, up to 4,250 square feet of ground floor creative office, and not less than 20,700 square feet of ground floor neighborhood- serving retail; and WHEREAS, a Draft Environmental Impact Report dated October 2011, and a Final Environmental Impact Report dated April 2012 have been prepared analyzing the environmental effects of the development agreement; and I WHEREAS, the revisions to the project plans submitted August 13, 2012, resulted in potentially significant impacts with respect to Aesthetics (Shade and Shadows) and, therefore, pursuant to CEQA Guidelines Section 15088.5(a), a Recirculated EIR was prepared and recirculated for a 45 -day public review period from August 31, 2012 to October 15, 2012; and WHEREAS, a Revised Final EIR was published on November 1, 2012, which contains all comments and responses to comments received during the comment period for the Recirculated EIR and analyzes the revised project; and WHEREAS, on November 13, 2012, the City Council adopted resolutions certifying the Final Environmental Report and adopting a statement of overriding considerations and mitigation monitoring plan; and WHEREAS, the development agreement is consistent with the objectives, policies, general land uses and programs specified in the General Plan, as described below, and as detailed in the accompanying City Council staff report prepared for this proposed project and the exhibits thereto, including but not limited to: (a) Consistent with LUCE Goal D24 and Policy D24.1, the Project's location, mix of uses, and design, capitalizes on the Expo Light Rail station at Bergamot Arts Center by contributing towards creating a mixed -use 17 hours per day, 7 days per week neighborhood with a diverse mix of creative arts facilities, local- serving uses, and residential types that provides a quality transition to residential neighborhoods to the north, east and south. (b) Consistent with LUCE Goal LUCE D25 and Policy 25.1, two new streets that include a portion of Pennsylvania Avenue between Stewart and Stanford Streets and New Road will enhance the circulation and transportation in the Mixed -Use Creative District with pedestrian, vehicular and transit improvements that form an interconnected grid of vehicle and pedestrian streets and bicycle paths to facilitate circulation in the district. (c) The Project provides for the donation of land and the development of parking spaces for future affordable housing and the provision of 16 affordable housing units within the proposed project, of which 7 will be affordable to extremely low income households and 9 for very low income households, consistent with Policy LU 2.4, which calls for the creation of diverse housing options along the transit corridors and in the activity centers, replacing some commercial potential with additional affordable and workforce housing, and encouraging affordable workforce housing near the transit stations. (d) The Project is a mixed -use project that complies with the general land use parameters encouraged in the Mixed Use Creative land use designation and complies with the requirements of the City's Rent Control Charter Amendment, consistent with LUCE Policy D24.13, which states "retain the Village Trailer Park to the extent feasible, and permit recycling to other uses that are 0 consistent with the MUCD and in compliance with the City's Rent Control Charter Amendment and sections of the California Government Code applicable to recycling mobile home parks." (e) The new streets in the Project will be designed as complete streets to accommodate pedestrians, cyclists, and vehicles, consistent with LUCE Goal LU 19 and Policy LU19.2, which requires the design and operations of streets with all users in mind including bicyclists, transit users, drivers and pedestrians of all ages and abilities. (f) The Project is designed with significant setbacks and stepbacks, provides ground -floor neighborhood serving retail on Colorado Avenue, and provides significant building articulation and skyline variation, particularly on the upper floors, throughout the project, consistent with LUCE Policy B12.1, which encourages local- serving retail and residential uses along the avenue and stepping down the mass of buildings to provide transitions to the adjacent lower - scale residential areas. (g) The implementation of a Transportation Demand Management (TDM) plan in efforts to reduce vehicle trips in the area and reduce associated parking demand consistent with LUCE Circulation Policy T19.2, which seeks appropriate TDM requirements for new development. 0 (h) The project is consistent with the LUCE's overall land use policies by providing community benefits for the area, including but not limited to, two new streets (Pennsylvania Avenue and New Road) that will be dedicated to the City as surface easements; payment of a transportation infrastructure fee; contributions to childcare; contributions to services for seniors, disabled persons, and families with minor children; ground floor open space; a local hiring program for construction and permanent employment; reserved space to accommodate bicycle and car sharing; contribution towards the start -up costs for a district -wide transportation management association; and a TDM plan that provides for bicycle parking and facilities for a variety of on -site users and transit subsidies for residents and employees. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES HEREBY ORDAIN AS FOLLOWS: SECTION 1. The Development Agreement attached hereto as Exhibit 1 and incorporated herein by reference by and between the City of Santa Monica, a municipal corporation, Village Trailer Park LLC, a California Limited Liability Company, and Village Trailer Park Inc., a California corporation, is hereby approved. 5 SECTION 2. Each and every term and condition of the Development Agreement approved in Section 1 of this Ordinance shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The City Council of the City of Santa Monica finds that public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Development Agreement, to the extent of such inconsistencies and no further, be repealed or modified to that extent necessary to make fully effective the provisions of this Development Agreement. SECTION 3. Any provision of the Santa Monica Municipal Code or appendices thereto, inconsistent with the provisions of this Ordinance, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to effect the provisions of this Ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this Ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of any competent jurisdiction, such decision shall not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this Ordinance, and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the Ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage of this Ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. This Ordinance shall be effective 30 days from its adoption. APPROVED AS TO FORM: r i MARSHA/JONES MOB TR�IE City_,Attorney EXHIBIT 1 DEVELOPMENT AGREEMENT From: Dan0colphanvoldures.com To:. Council Mailbox; Richard Bloom; Robert Holbrook; Bobby Shrive; Kevin McKeown Fwd; Gleam Davis; Terry O'Day; Pam OConnor; Rod Gould; David Martin; Yng Yeo; Clerk Mailbox Subject: Fwd: FOSP: Village Trailer Park - 6 reasons to not approve the DA on 7/24 Date: Wednesday, July 25, 2012 9:30:27 PM Dan Dan Halperin 1030 Cedar St. dan@epiphanypictmres.com 310.749.6253 To: Mayor Bloom and City Council members RE: Village Trailer Park development agreement - 7/24112 agenda item 7 -E http / /www smgov net / departments / council/ agendas/2012/20120724/a2012O724 htm The Village Trailer Park has been described as an irreplaceable neighborhood with historic roots that has enabled affordable home ownership for low- income residents of Santa Monica for more than 50 years. If the city allows it to be destroyed, it can never be replicated. I urge the City Council to do the following: 1. Direct staff and the developer to seriously consider the Alternate Project proposal presented by Ron Goldman to the Planning Commission. It would preserve the eastern half of the trailer park, while allowing the developer to build on the western half. Mr. Goldman is an experienced architect, planner and builder, and a Fellow of the American Institute of Architects with degrees from Princeton and M.I.T and nearly 50 years of experience in the field. Mr. Luzzatto, who seems to have no prior experience in developing projects of this type, claimed that Mr. Goldman's proposal would "not pencil out." Mr. Goldman disagreed. In the November 2007 Memorandum of Understanding, "VTP agrees that the Development Agreement Application review shall require the preparation of an Environmental Impact Report (EIR), which would review a reasonable range of alternatives including. but not limited to, a resident owned mobile home park subdivision, and alternative rezones and projects (including reduced scale projects that would avoid or substantially lessen potentially significant environmental impacts as required by CEQA)." The other concern for Sunset Park residents is that the current project will generate more than 2.000 new daily car trips. It is one of many large development projects in the pipeline or under construction in the Bergamot Area, totaling more than 2 million square feet, which will generate thousand of daily car trips through our neighborhood. A reduced project would reduce the impact of traffic on residential neighborhoods. 2. Delay approving additional Development Agreements in the Bergamot Area until the Bergamot Area Plan is completed. Why should the federal government waste over $600,000 giving a grant for the Area Plan to the City of Santa Monica if the city is going to continue approving millions of square feet of large developments before the plan is written and adopted? 3. Hire an expert consultant to do an independent assessment of all state and federal rules and laws regarding the closure of mobile home parks. 4. The Council should not feel obligated to approve the Development Agreement because of the November 2007 Memorandum of Understanding. "This MOU does not create in VTP any entitlements, rights or approvals for the use of the Property.... The City cannot and does not prejudge or make any commitments regarding ultimate approval of the Development Agreement Application .... nor shall any part or all of this MOU be construed on the part of the City as an obligation to grant any permits, entitlements or approvals." 5. The Council should not allow the developer to replace 109 rent control units, that are apparently not covered by vacancy decontrol under mobile home residency law, with only 11 rent control units This is a "gill' to the developer that the City will apparently have to pay for -- to the tune of more than $50 million over the next 50 years. 6. Eliminating Village Trailer Park would be the first time Santa Monica homeowners have been thrown out of their homes in nearly fifty years. In the 1950's, the Belmar Triangle, an African - American neighborhood was destroyed by the City of Santa Monica in order to build Santa Monica Civic Auditorium. Also in the 1950's, "the city acquired 259 parcels of land along the beach south of south of Ocean Park Boulevard, displacing 316 families and 212 businesses, to build Santa Monica Shores." The "affordable" apartments in The Shores now seem to rent for about $4,000 a month. In the 1960's, the Santa Monica Freeway was built through the Pico neighborhood and, according the Los Angeles Times, "Nearly 600 families, mostly Latino and black, were displaced to make room for the freeway's path." Will Village Trailer Park become another low- income neighborhood demolished for some perceived greater good? What is the perceived greater good here -- preserving affordable homes for low- income residents, mature bushes and trees, a swimming pool and a club house, and a community of people who take care of each other -- or destroying all that in order to build 5 -story canyons of small, dark apartments and condos. If the Village Trailer Park goes, what's next -- destroying homes in Sunset Park so the FAA can have its way at Santa Monica Airport and build Runway Protection Zones in the residential neighborhoods instead of building Runway Safety Areas on airport property? Can we depend on the current City Council members to protect residents? We look forward to the Council's decision on Village Trailer Park, as it will set a precedent for the future. We hope for the best. From: clare m To: Council Mailbox; Richard Bloom; Robert Holbrook; Bobby Shriven, Kevin McKeown Fwd; Gleam Davis; Terry O'Day; Pam OConnor: Rod Gould; David Martin; Yng Yen; Clerk Mailbox Subject: 7/24/12 agenda item 7 -E Date: Wednesday, July 25, 2012 4:52:11 PM To: Mayor Bloom and City Council members RE: Village Trailer Park development agreement - 7/24112 agenda item 7 -E hip: / /www.smgov. net /departments /cou ncil/ agendas l20l2 /20120724/a2012D724. htm The Village Trailer Park has been described as an irreplaceable neighborhood with historic roots that has enabled affordable home ownership for low- income residents of Santa Monica for more than 50 years. If the city allows it to be destroyed, it can never be replicated. I urge the City Council to do the following: 1. Direct staff and the developer to seriously consider the Alternate Project proposal presented by Ron Goldman to the Planning Commission. It would preserve the eastern half of the trailer park, while allowing the developer to build on the western half. Mr. Goldman is an experienced architect, planner and builder, and a Fellow of the American Institute of Architects with degrees from Princeton and M.I.T and nearly 50 years of experience in the field. Mr. Luzzatto, who seems to have no prior experience in developing projects of this type, claimed that Mr. Goldman's proposal would "not pencil out." Mr. Goldman disagreed. In the November 2007 Memorandum of Understanding, "VTP agrees that the Development Agreement Application review shall require the preparation of an Environmental Impact Report (EIR), which would review a reasonable range of alternatives including but not limited to a resident owned mobile home park subdivision, and alternative rezones and roiects (including reduced scale projects that would avoid or substantially lessen potentially significant environmental impacts as required by CEQA)." The other concern for Sunset Park residents is that the current project will generate more than 2.000 new daily car trips. It is one of many large development projects in the pipeline or under construction in the Bergamot Area, totaling more than 2 million square feet, which will generate thousand of daily car trips through our neighborhood. A reduced project would reduce the impact of traffic on residential neighborhoods. 2. Delay approving additional Development Agreements in the Bergamot Area until the Bergamot Area Plan is completed. Why should the federal government waste over $600,000 giving a grant for the Area Plan to the City of Santa Monica if the city is going to continue approving millions of square feet of large developments before the plan is written and adopted? 3. Hire an expert consultant to do an independent assessment of all state and federal rules and laws regarding the closure of mobile home parks. 4. The Council should not feel obligated to approve the Development Agreement because of the November 2007 Memorandum of Understanding. "This MOU does not create in VTP any entitlements, rights or approvals for the use of the Property .... The City cannot and does not prejudge or make any commitments regarding ultimate approval of the Development Agreement Application .... nor shall any part or all of this MOU be construed on the part of the City as an obligation to grant any permits, entitlements or approvals." 5. The Council should not allow the developer to replace 109 rent control units, that are apparently not covered by vacancy decontrol under mobile home residency law, with only 11 rent control units. This is a "gift" to the developer that the City will apparently have to pay for -- to the tune of more than $50 million over the next 50 years. 6. Eliminating Village Trailer Park would be the first time Santa Monica homeowners have been thrown out of their homes in nearly fifty years. In the 1950's, the Belmar Triangle, an African - American neighborhood was destroyed by the City of Santa Monica in order to build Santa Monica Civic Auditorium. Also in the 1950's, "the city acquired 259 parcels of land along the beach south of south of Ocean Park Boulevard, displacing 316 families and 212 businesses, to build Santa Monica Shores." The "affordable" apartments in The Shores now seem to rent for about $4,000 a month. In the 1960's, the Santa Monica Freeway was built through the Pico neighborhood and, according the Los Angeles Times, "Nearly 600 families, mostly Latino and black, were displaced to make room for the freeway's path." Will Village Trailer Park become another low- income neighborhood demolished for some perceived greater good? What is the perceived greater good here -- preserving affordable homes for low- income residents, mature bushes and trees, a swimming pool and a club house, and a community of people who take care of each other -- or destroying all that in order to build 5 -story canyons of small, dark apartments and condos. If the Village Trailer Park goes, what's next -- destroying homes in Sunset Park so the FAA can have its way at Santa Monica Airport and build Runway Protection Zones in the residential neighborhoods instead of building Runway Safety Areas on airport property? Can we depend on the current City Council members to protect residents? We look forward to the Council's decision on Village Trailer Park, as it will set a precedent for the future. We hope for the best. Please do not destroy the unique, diverse, and historical aspects of the city we love! Clare McCaffrey From: John Reynolds To: Richard Bloom; Robert Holbrook; Bobby Shrive r; Kevin McKeown Fwd; Gleam Davis; Terry O'Day; Pam OCon m ; Council Mailbox; Rod Gould; David Martin; Clerk Mailbox Subject: RE: Village Trailer Park (not sure of agenda Item number) Date: Thursday, July 26, 2012 11:37:11 AM To: Mayor Bloom and City Council members RE: Village Trailer Park I'll be straight with you .... I don't have a nostalgic love of trailer park life or know any of the inhabitants living there but I do get down right crazy when unnecessary traffic is added to an already over congested corridor. So I urge you..... Please don't add more car trips and vacate Santa Monica residents! John Reynolds 3217 17th Street I urge the City Council to 1. Direct staff and the developer to consider the Alternate Project proposal presented by Ron Goldman to the Planning Commission. [twill preserve half of the trailer park, reduce the size of the new development, and reduce the traffic impact on residential neighborhoods. 2. Delay approving additional Development Agreements in the Bergamot Area until the Bergamot Area Plan is completed. 3. Hire an expert consultant to do an independent assessment of all state and federal rules and laws regarding the closure of mobile home parks. 4. Do not feel obligated to approve the Development Agreement because of the November 2007 Memorandum of Understanding. 5. Do not allow the developer to replace 109 low income rent control units, which are apparently not covered by vacancy decontrol under mobile home residency law, with only 11 low income rent control units. 6. Eliminating Village Trailer Park would be the first time Santa Monica homeowners have been thrown out of their homes in nearly fifty years, Don't do itl From: David Whatley To: Richard Bloom Cc: Clerk Mailbox; lao(-lrand.oro Subject: Re: Letter dated July 29, 2012 Date: Monday, July 30, 2012 12:06:05 AM *inflicted upon On Sun, Jul 29, 2012 at 11:53 PM, David Whatley <davidwhatley07(cbgmail com> wrote: July 29, 2012 Mayor Richard Bloom _ City of Santa Monica 1685 Main Street, Room 209 Santa Monica, CA 90401 richard bloom@smgov net i Dear Mayor Bloom, The purpose of this letter is twofold: #1. To follow -up on the letter I wrote to you and the City Council dated July 18, 2012. #2. To follow -up on the suggestion I made to the City Council at the regular City Council meeting on July 24, 2012. With regard to #1: I have received an email from Mayor Bloom which I am very thankful for; I replied back to his email just a few moments ago and stated that I would respond to what he had written when I have the time to do so. In this response, I will also make sure that - - -to the best of my ability - - -my response takes into consideration the most recent City Council updates with regard to agenda item 8 -A i.e. amending the City Charter - -- which, as you know, I spent considerable time discussing in my letter dated July 18, 2012. With regard to #2: As you may recall, during the Public Comments portion for agenda item 7E at the the regular City Council meeting on July 24, 2012, I suggested that the City take a further look into Relocation Trauma, which the presenter of the Staff Report for 7E acknowledged would indeed be inflicted and experienced by the residents of the Village Trailer Park. I suggested that a 3rd Party study be conducted before further action be taken and named RAND as a possible organization to undertake such an investigation. I would like to let the Council know that I indeed did contact RAND this past week and had the opportunity to speak with Ms. Iao Katagiri. Ms. Katagiri was most lovely and generous with her time last week and for that I am most grateful and appreciative. I learned that RAND does not currently do the type of research I was inquiring about i.e. Relocation Trauma; however, I was referred to both the UCLA Neuroscience Department and USC Keck School of Medicine - - -- institutions which may in fact conduct Relocation Trauma research. I would like to let the Council know that I will be contacting both UCLA and USC regarding Relocation Trauma research and will report back to the City on what I find out. Thank you so much for your time and I hope everyone has a great week. Sincerely, David Whatley cc: Santa Monica City Clerk lao Katagiri, RAND Corporation From: Council Mailbox To: Clerk Mailbox Subject: FW: Thank you for the commitment, good faith, and stamina which... Date: Monday, July 30, 2012 10:30:32 AM Bridget Stermer Executive Administrative Assistant Santa Monica City Manager's Office 310- 458 -8301 Bridget, stermer(Ja smgov.net From: Curtis Raynor [ mailto :curtisraynoris @gmail.com] Sent: Saturday, July 28, 2012 3:39 PM To: Richard Bloom; Gleam Davis; Pam OConnor; Robert Holbrook; Terry O'Day; Bobby Shriver; Council Mailbox; Rod Gould; David Martin; ling Yee Subject: Thank you for the commitment, good faith, and stamina which... ...you displayed during Tuesday night's public hearing. I had submitted a late chit and in the minute alloted me I don't feel I expressed myself well. Had I another few minutes, and had I the gift to think more clearly on my feet, I would have expressed the following: I think it would be helpful to uncouple the fate of the trailer park and this huge new development. If the trailer park's owners choose to close the park, that is their business and ethical choice. But need our city grant the re- zoning that these owners are asking for? Do we have to be complicit? Could we not do what's in our power to either help find a buyer (e.g. the nonprofit group whose representative spoke on Tuesday night) or to relocate the residents? This may not be an apt_ analogy (and if not, my sincere apologies to the owners) but it seems that the owners have taken some people hostage, have a gun to their heads, and have given the city an ultimatum: either accept our development package and our help in relocating the present residents, or we'll shut the place down, let the residents fend for themselves, and allow the land to lie fallow. To my mind, this rather belies the "good guy" image one of the owners is trying so hard to present. Do we have to give in to the demand? Could we not, instead, do what we can to extricate the hostages and stop the hostage - taker's machinations? As for the planned East Village project, I think the scale itself is monstrous. The proposed size seems so inappropriate for the neighborhood. And contrary to the magical thinking espoused by the owner and several partisans on Tuesday night, I cannot see how the traffic congestion in this part of town will do anything but worsen from the several hundred cars coming and going from this project alone, to say nothing of the other projects planned for both sides of Stewart. Thank you for taking these issues seriously. And thank you for taking all the time you need to explore possible options (such as the reduced trailer park and a smaller development project.) Sincerely, Curtis Raynor 1440 Harvard Street From To: Subject: Solo sending... From David - -CC meeting -- Tuesday, 7 -24- -Item 7e Date: Wednesday, July 25, 2012 12:11:42 PM Attachments: hea-- health care reform-- 7 -11 -12 doc Avo - -to- -why climate...-- 1- 26- 12.doc Avo - -why socialism-- einstein-- 6 -11 -12 doc Avo - -to -- capitalism and democracv --- 12- 13- 11.doc article- -ultra rioht stranglehold-- truthout org-- 9 -20 -11 doc Avo - -to- -the foreclosure crisis- 4- 17- 12.doc avo -- politics-- lakoff- -a framing memo-- 10 -20 -11 doc hom- -talk. 7 -24, e at co-- 7- 19- 12.doc Hom-- letter. 7 -24, e to cc-- 7- 19- 12.doc Hi Rebecca, This that we talked of —an hour ago, the e I had earlier only sent to Council Members and staff [as attachments: letter, talk notes, and 7 articles], all now needing to go into the City record, if you would. My apology for causing you this extra effort 1 David Latham 310 315 -2660 - - - - -- Original Message From: thedbl @verizon.net Date: Jul 20; 2012 2:19:00 AM Subject: From David - -CC meeting -- Tuesday, 7- 24 - -Item 7e To: thedbl @verizon.net Hi City Council -, Rent Control Board- members and all, Happily 1 imagine for some, this will likely be the last wordy e-mail from me about this VTP matter. Please forgive if you will, my inclusion of these other only peripherally related social issue files. I took this opportunity to spew all these since, in my view, multiple crises are very much in motion now, it's hard to say just how important the sharing of information may prove to be, and we are after all to some degree connected to and mayhaps will even be affected in time by such mentioned issues despite how "far away" many may seem to be from our lives, yes? Anyway, thanks for letting this into your cpu. Take care, David Latham Hom— letter, 7 -24, e to cc- 7 -19 -12 Re: VTP DA 07 -005, Item 7e Dear Council Members, City Manager, Staff, and all, So, here we are now into year 7, and about to decide at this meeting [and at the RCB one on 8/21, whether justice or whether greed is to be served. Regrettably, it presently seems like greed is going to win out. What of worth. now to say here about this crime in process ?... First off, it needs to be noted that serving justice is still the issue of greatest import with this insulting assault on lives. All the talk about the grand "project ", various "helpful" relocation considerations, and such are all but obfuscating smoke. A blatant crime is being attempted here, and that criminal action needs to be stopped. Two levels of anger come to mind as I look back on these years of harassment and threat: [1] Certainly, when a stranger walks into my home and tell me that I have to get out so he can make a lot of money after destroying it, I become, as you might imagine, much less than happy. Actually, we home owners here were incensed when this closure notice, sans any discussion about our rights and needs, was first dropped on us. Initially you, our Council, seemed to be most unhappy too, as I recall some early talk about lawsuits and rights being violated. [2] Of arguably even greater import though, is the angering crime against time this years -long money - driven rude effort to steal from and harm us and our small town has brought into our lives. Just this morning (7119), while typing this, I heard news again about the spreading, now nearly Nation- wide sustaining drought, already having devastating impact upon crops and animal stocks. I could type here for pages about the coming other environmental "storms" building up to make most of us more miserable than we ever imagined possible; about the challenges to our relationships and values the likely most important election we will ever again see in our lives will be ramping up to soon; about the again society - harming next investing marketplace crimes soon enough to bring loss here locally, Nationally, and abroad; about our again proving we still don't really want a health care system (single payer, yes!?) that works and of the increased pain that denial will bring; about the yet to be caused further heartache for those of us with the least due to continued blockage of healthy commerce by those with the most and the banking /marketplace means to further paralyze the flow of cash; about the growing acceptance that accountability and laws don't really apply if one can only have enough wealth; and about our neurosis - driven compulsion to treat each other with endless brutal solve- nothing warring instead of with sharing helpfulness; and on and on I could go, yes? We here in this troubled little town, more challenged than it has ever been to keep viable its economy after having overbuilt its limited space and let nearly die its manufacturing heart, simply do not have time to waste. As general society heads now toward several cliffs so to speak, letting this self- interested, thieving enterprise take so much of this City's time and energy is as dangerous as it is insane. Yet another silly development enterprise, this ... {Built to look like "passing trains" to accord the grand Expo-line community we all know will usher in a wonderful new era of fresh new business and abated traffic problems here ?...Please, give me a break!) ... A most inappropriate and neighborhood- harming development. One that would be laughable . if it weren't so foolishly being given all this attention. We here should all be purple enraged that capital- seeking greed is again being given more respect than the needs and rights of people. Again, citations 3 paragraphs back deserve our attention far more than this thieving aim. We need to dispense with it immediately. And not just angry, I've been puzzled too at times over the course of these "DA" years: As this "considering" of the merits of this proposed development have played out, I've repeatedly been amazed that so many have continued to consider homeownership of trailer homes not really ownership of any worth at all. Nothing but momentary, passing attention has so far been paid to the fact that trailers here were purchased at significant buy -in expense and that just as, City wide, rent- and home purchase- costs have increased over these several decades, so too has grown the market value worth of these trailer homes. . Too, factoring in the cost, psychologically, which upheavals of these decades -built trailer lives, and the modern -day higher living costs years -later replacement housing (comparable or not) imposes, and the .pegging of the worth of these trailers becomes. not so glib and easy a calculation to. make. However, with this DA approval already apparently presumed by some a done deal, and with plans seeming already in motion in anticipation of the removal of the trailers and the relocation of these remaining residents, the mantra -like talk keeps being touted about "gracious move -out settlements" in the range of $18,000, so that these homeowners can then have "adequate" recompense to re -build their lives elsewhere. That "elsewhere ", of course, also a most problematic sore point in this crass ousting effort. So, just why is it that such disrespecting, dismissive, life- wrecking actions are being so callously tossed out as fair? How can such insultingly'small relocation compensation be offered? How can it be thought that taking away the right to own one's home, and the forcing of relocation to a habitation nowhere at all comparable to that style of living which had been a chosen, then improved upon and enjoyed for years, would ever be considered acceptable treatment? Basically, I think holding such views about recompense, relocating, and such may in part come from not really understanding what it means to own and live in a trailer and to ongoing pay for rental of the space on which it is set -up and utility- serviced for habitation. Of possible value for what may lie ahead in this matter, here's how that "own home /rent space" business relationship has worked at this trailer park: Each of us owning our trailer homes and living in them at VTP, first came to the property and saw a trailer we desired to buy. We then qualified to pay the considerable buy -in cost to then secure ownership title to said trailer, becoming both then home- owners and California /Santa Monica rights - holders in doing so. At the same time, we also qualified for, and undertook to then start with an ongoing legal contract to pay for and sustain continuing residency at the home site on which the home we had just purchased was — already, in nearly all cases — installed and ready for habitation. ...It seems worth noting here that ownership and residency rights acquired when these legal transactions occurred, are essentially just the same as rights which would have been acquired had these instead been business actions involving the purchase of a home on any land ...say, north of Montana Blvd, for example, or really, at any condominium- or home- site anywhere in this small City... With the acquisition of such ownership rights, we homeowners also undertook our residencies with other reasonable expectations: [1] That the zoned use of the land would not change— Since the City had zoned the property for mobile home residency use, and since VTP had sustained, even before that time ('88), and for decades earlier had already been a thriving.business managing that very dual relationship [i.e., with land owner managing VTP business needs and residents owning /living in their trailer homes and paying for their space and services], expectation by both parties was that that business relationship would sustain, without limit, overtime. And.that, [2] Right to resell trailer homes would be sustained— We residents undertook to own our homes and to continue our residency contracts with presumption that we would also endeavor to maintain our homes much as we had acquired them, and that the property owner too would endeavor to maintain the Park property much as residents had encountered it when buying into that conjoined business relationship. This is an important presumption, since the continued process of the VTP business is dependent upon residents being able to maintain aesthetic home worth should they perhaps ever need move Wor sell their holding in the trailer, and so that the property's owner would always also be guaranteed business solvency with either continuing- or recycling - residencies via trailer home - ownership turn over. Logic seems to say, on both counts — continued security of zoning, and right to sell —that few or none of us home owning residents would ever have even thought about putting up such significant funds- and energy - outlay to buy and set up to live in this unique kind of home situation, if something so capricious as a unilateral whim might jeopardize the continuity of that right of residency and security of holding. If the law doesn't protect those rights, then the law is a lie and needs to be changed. Now, certainly, just as trailer homeowners have clear rights to either continue their residencies, to sell their homes to others [if qualifying] who will then take up residency, or to vacate their residencies and have their homes moved elsewhere *, so too does this property owner have rights. [ *If such might even be possible, which is not now the case for most of these trailers currently on the VTP property, what with there being few other trailer parks anywhere, near of far, which would these days permit their set up. With there currently being –844 trailer parks in America up for sale, some 50+ in California, trailer -park living is now a more threatened living venue. Too, after years sitting on unused tires, and with additions having been built onto many of these trailers, towing or hauling by truck could mean significant work and cost.] As with we home - owning residents having right to sell homes to reside elsewhere, the property owner too, as I understand the law, has every right to abandon doing the VTP management business. Just as with the residents, he too could sell his interest in it to another who wanted to manage and seek profit from the business. But, and here's where the trailer homeowner /park owner rights roster is not identical: While residents may sometimes be able to have their trailers moved to some other location, the property owner cannot similarly "move" the land. And here, of course, is where this whole time /energy- taking DA matter enters the picture... This VTP property owner* and his apparent_ entrepreneur associate seem to want to "move" the property by "changing" the use to which it is put. [ *Who, for perspective, it must be noted, inherited the property —has but most rarely ever been seen on the grounds —and seems never to have wanted to manage the business, as judged by his having had removed (arguably illegally) –45 of the 109 trailers on the grounds over these past 22 years; in essence, seeking to dismantle it to the point that he won't then have a trailer park to even need to manage.] And therein lies the rub. While he could have sought another to take over the business and leave, since (early on), as I recall, he /they( ?) had claimed intention to just cease managing the property, he did not do that. [Which would have been exactly analogous to a home - owning trailer resident wanting to live elsewhere {cease living in the park} by selling it to another who wanted to take up residency in it.] So, here obviously is where you, our Government, the 3rd party in this business arrangement, came into the picture, yes? In '88 you wisely saw need to preserve declining stock of affordable housing for those on the low end of the income ladder when you zoned the property with dedication to house those living in trailers. Jumping ahead to `06, that zoned circumstance put the land owner / associate(s) in a bind. Not that long after delivery of the closure notice upon residents, it became apparent that "ceasing to do the park business" did not mean either selling it to another or simply stopping doing the business. Instead, the owner /associate(s) really wanted to develop the land, and put it to a usage outside the scope for which it was zoned, so that they could then make a pile of money. ..Enter the kettledrums and all the strife that has since followed... So far, no one, in government or elsewhere, has given satisfactory answer to this question: Does ceasing to_do /manage /maintain the VTP business legally mean that the land owner can also then abandon the honoring of the legal residency contracts home - owning residents have sustained, for years in most cases, and have proven accorded to in business trade - sustaining monetary transactions with him? Said another way, do home - .owning residents in the VTP have actionable cause against the property owner since he, by ceasing the management business [and presumably eventually then no longer accepting their faithfully proffered space -use rent & related payments, whenever such cessation of park management action might actually take place], would then in effect be breaching the residency contracts he and they are dual in and needing to faithfully honor via regular exchange of funds for services with one another? Such a sad and sorry situation. Stir in a little greed, and look at all that can follow... ...So much else could be said here about other VTP- related matters over these years of what at very least many would term a less than ideal owner - resident relationship, and about a number of yet- unanswered and important questions that have arisen over this period as well... But, with something seeming to have happened *_since you originally also seemed most unhappy with this effort to force a change of zoned land use on you by this land owner; something which seems now to have turned you 180 degrees to make you seem more in the realm of perhaps complicit with this attempt to steal our homes. In any event, it now seems of little use spending more time here on such as this. Anyway, the aim to this point just being an effort to put on record what might help clarify what seems of most import or confusion about this DA matter, I can wrap that task up here... [ *I can only surmise said seeming turnabout might involve the present grand Expo -line development planning now in process for the City's east end, or some such reason? ... If so, though grist for another conversation perhaps, I can only respectfully say here that, in my mind, such planning so far looks most dangerously short - sighted and misguided.] Hopefully though, my wondering is incorrect and the meeting on 7/24 will, after these tortuous years of contention, finally get down to making one of these two choices: [1] Preserve a now rare and historic /visitor- interesting part of the City, a still - viable business enterprise, a threatened component of the City's dwindling natural -plant resource, and as well, with all this situated on a compact few acres, a priceless resource stock of properly sized and scaled, affordable, "greenable ", unique, and desirable housing sites for those of low -to- middle income; or, [2] Accede to the self- serving aims of a minority, so that the lives of a vulnerable group of the City's residents, their neighborhood, and the community as a whole will be harmed when an ill- suited development then trashes, at great environmental expense, what is already a viable business and a valued, nearly irreplaceable resource, and moves the City yet further down a road debasing_ yet more of what makes life in it desirable. Practically, just what would the preserving action option require? First, that this property owner either sells his interest in the property to another, or gets back to more honorably doing the management business as it is needs to be done to stay viable and lifestyle supporting. More specifically, returning the VTP again to a residents' - sustaining, business - nurturing state, would most likely require some joint owner /resident planned actions toward: (1) restoring past -years harms to the grounds, (2) re- stocking of it with vintage trailers *, and, likely efforts involving the City too to assist (3) in further modernizing several of its utility systems and in the adding of some "greening" facilities as well. [ *With so many parks now in decline, there may well be plenty of good- condition vintage trailers, similar to those the owner has had removed from the property, out of which —about 20 -30 would probably suffice to bring the business back to a positive cash flow— tenders could be put out, then arrangements made for towing /truck- hauling trips, and the populating of the now vacant pad sites; alternatively, there must also be those with appropriate skills available to manufacture (to at least look -alike status) new trailers to restore the vintage look the park once so naturally had evolve.] Once everyone, resident and ownership, could then get back on the same VTP- handling page, so to speak, it would likely not talk all that long or all that much effort to again make the property the beautiful and functional living oasis many were, just –22 years ago, so very glad to be living in. But, enough already, right? In terms of the many pro and con views about this development agreement and these east end expansion plans, let me end with this I happened to see the other day, and which seems quite apt, since so many seem still to have blinders on about this unique kind of living arrangement: We do not err because truth is difficult to see. It is visible at a glance. We err because this is more comfortable. Alexander Solzhenitsyn, novelist, Nobel laureate (1918 -2008) 1 wsmith @wordsmith.org I wish us all the best on 7/24, David Latham, VTP homeowner Ps: 9 attachments: 2 files e -ed to City Council, and 7 others about some of the social issues mentioned in passing in that long paragraph (this file), starting as "Just this morning ", on page 1. With over 200,000 and mushrooming number of new souls being born every day now, and with our shared and growing needs for resources and systems of communication bringing us ever closer and closer together, the more we can be aware of fast - moving, sweeping events and issues in motion, the better able we will likely be to make informed decisions about the parts we may need to play in such changing happenings. Hom —talk, 7 -24, e at cc- 7 -19 -12 Good evening everyone: David Latham, VTP homeowner, Two complaints, a question, a comment, and a request... Re: VTP DA 07 -005, Item 7e Granting residents only minutes to speak, with rare if any opportunity for discussion of concerns, handicaps having rights and needs well considered, compromises giving matters due diligence and is a process anything but democratic. It should be changed. Past actions by you and several other of our government departments suggest that approvals of this DA and the latest removal permit application have already been granted. Whether or not the case, but for the record now before you cast your vote, would you — and please, without any referencing of article, charter, code, regulation and such as simply the mandating cause —each please give me your personal view about precisely why it is just so simply "ok" for 5 strangers on a board [ironically one charged with protecting residency rights] to have such singular power that they can grant an entrepreneur permission to evict homeowners and then destroy their homes, and to so act without any hearing and despite that those homeowners have done nothing to violate the legal rights their sustaining home ownership /site- rental agreements grant them. As you know, I have long been on record supporting the often under - appreciated work you do, and, as this over - growing City becomes increasingly more complicated to manage, sympathize much with the challenges you 7 now face. Life now is certainly not simple. Sadly, though, destructive influences and less -clear agendas seem now to have corrupted your governing process. My trust that your body is acting with the integrity your position warrants is now very much diminished. This evening, as I had also tried to ask last month of RCB members, please honor the oath you took, act ethically, and forthwith disapprove outright this development agreement! It is a destructive insult to us all, residents and City alike. Avo —to —the foreclosure crisis-- 1 -17 -12 From: http : / /www.truth- out.org /prinUl1578 The Foreclosure Crisis: A Government in Denial By britney, by: Bruce Judson, New Deal 2.0 [3] 1 News Analysis The Federal Reserve sent a warning shot that housing is the greatest threat to the economy. The government should take note. As we start the New Year, the executive branch and Congress continue to pretend the gravest risk to our economy and social stability does not exist: the ongoing foreclosure crisis. The financial crisis began with the housing crisis and it will not end until we resolve housing. Government policymakers who seemingly ignore this basic fact are leading the nation to another potential catastrophe. This past week, a number of important events occurred in Washington, including important recess appointments by President Obama. However, the most noteworthy event did not make front page news: the Federal Reserve's [4] (apparently) unsolicited memo to the committees of Congress that oversee financial services warning of the dangers the current housing market poses for the economy. , This represents an extraordinary action and underscores both the seriousness of the continuing crisis and the absence of meaningful discussion of the problem in Washington. Bernanke's memo reviewed federal actions to date and effectively concluded that they were unlikely to solve this national tragedy. The memo concluded [4], in part: The challenges faced by the U.S. housing market today reflect, in part... a persistent excess supply of homes on the market; and losses arising from an often costly and inefficient foreclosure process (and from problems in the current servicing model more generally)... Absent any policies to help bridge this gap, the adjustment process will take longer... pushing house prices lower and thereby prolonging the downward pressure on the wealth of current homeowners and the resultant drag on the economy at large. This memo is notable for several reasons. First, it's important to remember that when the Fed speaks, it does so in sober, limited terms. So an unprompted Fed warning suggesting "a persistent excess of supply" and a "resultant drag on the economy" is comparable to the Secretary of Homeland Security holding a press conference to warn of the risk of an imminent national emergency. Second, an unprompted memo from Bernanke to the House means that he is so deeply worried he felt the need to speak out in as strong a voice as his position permits. Third, the Fed rarely speaks on issues unrelated to its direct activities. Indeed, The Wall Street Journal subsequently wrote [5], "For an institution that jealously guards its independence, the Federal Reserve is wading into treacherous political waters." Finally, co- ordinated speeches [6] by three top Fed officials further indicate the depth of the Fed's concerns. On Friday, the presidents of the New York and Boston Fed banks and Betsy Duke, a Fed Governor, all gave speeches detailing the need for aggressive action to spur a housing recovery. For example, William Dudley, President of the New York Fed, told [6] a group, "The ongoing weakness in housing has made it more difficult to achieve a vigorous economic recovery." There are a multitude of other indicators that our current treatment of the housing sector will at minimum prevent an economic recovery and at worst have disastrous consequences for the stability of the financial sector as well as the health of the middle class. (For the record, my analysis leans toward the latter of these two viewpoints.) These include the reportedly poor health of our financial institutions (zombie banks [71), the administration's seeming efforts [8] to cover this fact up, and the inevitable failure of federal homeowner assistance programs [91 that rely on the cooperation of financial institutions whose profit incentives are in the reverse direction. Consumer spending represents 70 percent of the nation's economy and is central to any economic recovery. To achieve sufficient aggregate demand [10] (i.e. total spending on goods and services), this will require spending by middle - income 111 ] individuals in addition to what we now call the 1 %. The Fed report suggests that the housing crisis makes such a recovery unlikely. The report found [4] that, in the aggregate, more than $7 trillion in home equity — more than half of the aggregate home equity that existed in early 2006 — has now been lost, noting, "This substantial blow to household wealth has significantly weakened household spending and consumer confidence:' Moreover, "Middle- income households, as a group, have been particularly hard hit hit because home equity is a larger share of their wealth in the aggregate than it is for low - income households (who are less likely to be homeowners) or upper- income households (who own other forms of wealth such as financial assets and businesses)" These households have seen their home equity decline by an estimated 66, percent. Moreover, the fear of a continuing loss of wealth (which is a cushion against job loss or other economic emergencies), the fear of job loss itself, the negative effects of underwater homes, lack of forbearance for unemployment (a point the Fed particularly emphasizes), and consumers struggling to meet mortgage payments in a far more difficult environment are all dragging the economy down. There is also a far worse possibility. Today, an estimated 29 percent of all homes with mortgages [12] are underwater. In addition, at least one respected analyst estimates that a total of 14 million homes [13] will be foreclosed on from 2007 to the end of the crisis. This represents a hard -to- imagine one in every four mortgages. With foreclosures increasing, there is now such a looming imbalance of supply and demand that, as the Fed notes, further decreases in home prices are likely. Some believe home price reductions of another 20 percent [14] are likely. This would, in all likelihood, have disastrous consequences on at least three fronts — and ripple effects that are impossible to predict. First, so many homeowners would be so far underwater that massive walkaways would be likely. The negative impact on consumer spending of such price declines would almost certainly lead to a vicious cycle of more job losses, leading to further walkaways by struggling consumers. Second, the mortgage securities market would be in chaos. Nonperforming loans would lead to the forced recognition that bank capital (based on the value of mortgages in bank portfolios) is weak or insufficient. Third, it is almost impossible to imagine foreclosures on the massive scale anticipated without dire social consequences or even some form of social unrest. As Peggy Noonan has observed, the real meaning of Occupy Wall Street is that this is just the beginning [15] of the protests we are likely to see. "OWS is an expression of American discontent, and others will follow," she predicts. Protests and social unrest are particularly likely if people feel they are unfairly losing their homes to support irresponsible, law- breaking institutions that have successfully disregarded the fundamental rules of capitalism and good citizenship. Mechanisms to avoid this possibility are one of the central issues I address in my forthcoming book, Making -Capitalism Work forthe 99%: A Manifesto [16]. What is shocking is the almost total lack of attention the administration has paid to suffering homeowners. It's hard for me (and apparently Chairman Bernanke) to understand how the administration can possibly hope to revitalize the economy without seriously addressing the overhang of consumer housing debt. Moreover, the failure to address the risk this poses for a broader economic catastrophe borders on the inexcusable. If President Obama is serious about saving the middle class and reducing income inequality [17], the administration needs to be. far more aggressive in developing policies to keep homeowners as homeowners. As I have written before, this was one of FDR's central goals [18] in the New Deal. Detailed proposals for addressing this extraordinary risk do exist [19]. However, they will require a determined effort. There are solutions, but they are not simple. What is most important right now is that we recognize we are in a lifeboat that will not reach land. We need to focus on implementing a meaningful solution to the problem. A clock is ticking and Washington needs to acknowledge that a witching hour is approaching. Avo— to— capitalism and democracy- 12 -13 -11 From: http: / /www. truth- out.orglcapitalism- enemy - democracy /l323789051 Is the Enemy of Democracy Tuesday 13 December 2011 by: David Krisfjanson- Gural, Truthout I Op -Ed Occupy Wall Street, October 21, 2011. (Photo: Tony the Misfit) The most significant accomplishment for Occupy Wall Street (OWS) to date is that the Occupiers have managed to poke a hole in the legitimacy of neoliberal capitalism and its central claim that unregulated markets provide opportunity and freedom. The Occupiers have accomplished this feat in a surprising way, peacefully, with home -made signs, signs that say things like, "If I had a lobbyist, I wouldn't need this sign." OWS has punctured the neoliberal fagade simply by having the audacity to gather in public, in bold defiance of the police and to bear witness, by their solidarity and cooperation, to the idea that the Washington Consensus has long denied - that a different world is possible. Phil Rockstroh puts it this way: "the walls of the neoliberal prison are cracking ... We are no longer isolated, enclosed in our alienation, imprisoned by a concretized sense of powerlessness; daylight is beginning to pierce the darkness of our desolate cells." At the core of this neoliberal ideology is a simple assertion- economic exchanges promote freedom because they are voluntary and, thus, they only occur if both parties believe they will benefit. Unregulated market exchanges thus allow individuals to engage with others in complex social arrangements without coercion, without impinging on individual liberty. Government is needed, but only to define and enforce property rights and to create and regulate the currency individuals need to undertake market exchanges. Liberal Keynesians, who argue for expanding government in order to regulate or oversee individual exchange, are denigrated because they seek to interrupt these free and voluntary agreements and they, therefore, undermine individual liberty. Reagan, who ushered in the neoliberal era, said it this way: "Government is not the solution to the problem; Government is the problem." In this extreme libertarian view, capitalism is the champion of democracy, the champion of freedom. The flaw in this neoliberal reasoning is not hard to see. Ownership of wealth obviously confers power; it gives some individuals an upper hand in the "voluntary" exchanges they make with others. Lacking the means otherwise to support ourselves, most of us must hire out our ability to do work in exchange for wages. We might do quite well if we are educated and talented, lucky or white, but even so, we ultimately produce more value than we are paid - that is, after all, the reason we are hired. Wealth ownership, thus, gives an upper hand to employers in these voluntary exchanges with working people. The extra value we create flows steadily into the hands of wealth holders and we don't have a say over what it is used for. This upper hand in these so- called voluntary exchanges provides an ongoing and increasing source of wealth accumulation that is self- reinforcing. Money begets money. That is after all what capital is, money advanced for the purpose of making more money. Excluding people from having a say over what happens to the wealth we create is the first and the most fundamental way that any capitalist system undermines democracy. We are fundamentally disenfranchised in the places we work. Wealth owners control the levers of investment and, thus, the "needs" of capital trump those of workers when it comes to making decisions about what gets produced, how and for whom. Beyond this, neoliberal capitalism goes further - it uses the value you and I create to enforce a virtual dictatorship by wealth in the political sphere. The most obvious manifestation of this dictatorship by wealth is the unlimited corporate financing of our elected representatives. But this financing is only the tip of the iceberg. Not only must candidates pander to corporate interests to successfully raise the funds needed to run for office, once they are in office, they are plied and courted with unrelenting advances designed to ensure that they do not lose their focus and begin to think about something other that promoting a favorable business climate. Even deeper in the subsoil of this treasonous takeover of our democracy is the ownership and influence over the main vehicle.of public discourse, the news media. The manufacture of consent is accomplished by narrowing the acceptable range of debate to the question of how best to support economic growth (read profits) and American imperialism (read war). Where do the millions, or billions, that candidates raise end up? Primarily, this money ends up in the coffers of the corporate media - campaign advertising is the single most important source of revenue for the corporate media. So, it is an odd fact of American life that capitalism is equated with democracy while, at the same time, acting as democracy's most corrosive force. But think about it, if capitalism really supported democracy, if it really welcomed open, honest, wide - ranging debate about the values and practices of corporations and their elected representatives, why would they be sending their police in with bats and pepper spray to prevent the free, open exchange of ideas? Why would they not be handing out microphones, providing open access to the airwaves, organizing televised debates? If capitalism really were the champion of democracy, the Occupiers and their many allies would be celebrated. Instead we are disdained. The corporate elites fear and resist any questioning of their core beliefs because their ideas do not hold up to scrutiny and reasoned debate. That's how we all know - capitalism is the enemy of democracy. But is there any alternative? It is tempting to think that if we can only regulate capitalism effectively, we can harness its virtues and contain its vices, In fact, there is some evidence to support this view. The 99 percent were much better served in the post -war era in the United States, and they continue to benefit from efforts to rein in capitalism's excesses in Scandinavia and Northern Europe. But these efforts to regulate are under constant attack and a return to regulations is ultimately a brief inconvenience to the corporate elites. As Richard D. Wolff and others have noted, as long as the value you and I create is credited to the owners of capital, these owners have both the means and, given their distorted values, the incentive to undermine and neutralize any effective regulation and oversight we attempt to impose. Capital will continue to corrode democracy, as certainly as oxygen corrodes iron, as long as a few hold sway over investment and jobs and are committed to using the wealth that we generate to undermine the will of the people. In the words of Supreme Court Justice Louis Brandeis, "You can have wealth concentrated in the hands of a few, or you can have democracy; you cannot have both." Fortunately, a proven alternative to corporate capitalism already exists. For over 50 years, it has provided a practical example of how we can exfend.democracy to the workplace as a means of preserving democracy in our political lives. The basic idea of this experiment is to address the root of the problem, to uncover the means by which capitalism undermines democracy and to provide new institutional rules governing how we organize our economic lives. Over 50 years ago, the Mondragon Cooperatives in northern Spain developed their poverty- stricken regional economy by developing worker -owned and managed cooperatives. Co -ops place the ownership of wealth and the decisions concerning how wealth is invested in the hands of the people who produce the wealth. These institutions recognize that the wealth generated by an enterprise is the result of the collective efforts of all, and that those most affected by the decisions of the enterprise, workers and community members, ought to have the principal say in what happens to the wealth, how it is distributed and the purposes to which it is put. Many people argue that co -ops are impractical, but this simple, democratic principle rests at the heart of this highly successful, internationally competitive, stable and flourishing regional economy. It is an economy based on democratic management, worker ownership and democratic oversight and it faces its own challenges, yes, but has certainly proven the lie that there is no alternative to corporate capitalism. It shows that people, acting together, can use democratic principles to imbue their economic lives and their political lives with agency and meaning. And this effort is spreading to America's heartland. The Evergreen Cooperatives in Cleveland have successfully applied the principles of the Mondragon experiment to develop a thriving urban development project. As Gar Alperovitz argues, the linking of large anchor institutions with,worker -owned enterprises offers a practical economic development strategy that is politically feasible in the context of our current economic crisis. Many people are uncomfortable with the idea that working people can do without their corporate bosses. Quite a bit of time and energy has been spent trying to convince us that the idea that workers can manage themselves is preposterous. OWS has provided the opening for us to consider, debate and discuss what has previously been off the table. Economic democracy is not only possible; it is essential. As Bill McKibben and others have shown us, we cannot afford to continue on the trajectory of neoliberal capitalism. By democratizing the economy, we are taking the first necessary step toward a sustainable future. We are also taking a step toward reclaiming that peculiar American Dream of a government of, by and for the people. So, let's grasp the significance of what OWS is doing. We need to step boldly through the hole they have opened in the shiny fagade of our glad - handled, Madison Avenue, faux democracy. We need to take up the challenge of creating a real, substantive democracy, right here and now, in the very heart of America. We need to create an economic and a political democracy as a means of reclaiming our own dignity as working people, our own liberty as citizens and to ensure a livable world for those who come next. David Kristjanson -Gural is associate professor of economics and senior fellow of the Social Justice College at Bucknell University. His writing appears in the LA Progressive, Commondreams.org, the Williamsport Guardian and the Daily Item. He is a member of the Spilling Ink Writers' Collective. Avo —to —why climate...--1 -26 -12 From: http : / /www.truth- out,o[g /prinUll872 Why Climate Change Will Make You Love Big Government: A Secret History of Free Enterprise and the Government That Made It Possible by Christian Parenti Look back on 2011 and you'll notice a destructive trail of extreme weather slashing through the year. In Texas, it was the driest. ear [4] ever recorded. An epic drought there killed half a billion trees, touched off wildfires that burned four million acres, and destroyed or damaged thousands of homes and buildings. The costs to agriculture, particularly the cotton and cattle businesses, are estimated [5] at $5.2 billion -- and keep in mind that, in a winter breaking all sorts of records for warmth, the Texas drought is not yet over. In August, the East Coast had a close brush with calamity in the form of Hurricane Irene [6]. Luckily, that storm had spent most of its energy by the time it hit land near New York City. Nonetheless, its rains did at least $7 billion worth [7] of damage, putting it just below the $7.2 billion worth of chaos caused by Katrina back in 2005. Across the planet the story was similar [8]. Wildfires consumed large swaths of Chile. Colombia suffered its second year of endless rain, causing an estimated $2 billion. in damage. In Brazil, the life- giving Amazon River was running low due to drought. Northern Mexico is still suffering from its worst drought in 70 years. Flooding [9] in the Thai capital, Bangkok, killed over 500 and displaced or damaged the property of 12 million others, while ruining some of the world's largest industrial parks. The World Bank estimates [10] the damage in Thailand at a mind - boggling $45 billion, making it one of the most expensive disasters ever. And that's, just to start a 2011 extreme - weather list, not to end it. Such calamities, devastating for those affected, have important implications for how we think about.the role of government in our future. During natural disasters, society regularly turns to the state for help, which means such immediate crises are a much - needed reminder of just how important a functional big government turns out to be to our survival. These days, big government gets big press attention -- none of it anything but terrible. In the United States, especially in an election year, it's become fashionable to beat up on the public sector and all things governmental (except the military). The Right does it nonstop. All.their talking points disparage the role of an oversized federal government. Anti -tax zealot Grover Norquist famously set the tone for this assault. "I'm not in favor of abolishing the government," he said. "I just want to shrink it down to the size where we can drown it in the bathtub." He has managed to get [12] 235 members of the House of Representatives and 41 members of the Senate to sign his "Taxpayer Protection Pledge" and thereby swear never, under any circumstances, to raise taxes. By now, this viewpoint has taken on the aura of folk wisdom, as if the essence of democracy were to hate government. Even many on the Left now regularly dismiss government as nothing but oversized, wasteful, bureaucratic, corrupt, and oppressive, without giving serious consideration to how essential it may be to our lives. But don't expect the present "consensus" to last. Global warming and the freaky, increasingly extreme weather that will accompany it is going to change all that. After all, there is only one institution that actually has the capacity to deal with multibillion - dollar natural disasters on an increasingly routine basis. Private security firms won't help your flooded or tornado- struck town. Private insurance companies are systematically withdrawing coverage from vulnerable coastal areas. Voluntary community groups, churches, anarchist affinity groups -- each may prove helpful in limited ways, but for better or worse, only government has the capital and capacity to deal with the catastrophic implications of climate change. Consider Hurricane Irene: as it passed through the Northeast, states mobilized more than 100,000 National Guard troops. New York City opened 78 public emergency shelters prepared to house up to 70,000 people. In my home state, Vermont, where the storm devastated the landscape, destroying or damaging [13] 200 bridges, more than 500 miles of road, and 100 miles of railroad, the National Guard airlifted in free food, water, diapers, baby formula, medicine, and tarps to thousands of desperate Vermonters trapped in 13 stranded towns -- all free of charge to the victims of the storm. The damage to Vermont was estimated at [14] up to $1 billion. Yet the state only has 621,000 residents, so it.could never have raised all the money needed to rebuild alone. Vermont businesses, individuals, and foundations have donated at least 4 million [15], possibly up to $6 million in assistance, an impressive figure, but not a fraction of what was needed. The state government immediately released $24 million [16] in funds, crucial to getting its system of roads rebuilt and functioning, but again that was a drop in the bucket, given the level of damage. A little known state -owned bank, the Vermont Municipal Bond Bank [17], also offered low- interest, low- collateral loans to towns to aid reconstruction efforts. But without federal money, which covered 80% to 100% of the costs of rebuilding many Vermont roads, the state would still be an economic basket case. Without aid from Washington, the transportation network might have taken years to recover. As for flood insurance, the federal government is pretty much the only place to get it. The National Flood Insurance Program has written [18] 5.5 million policies in more than 21,000 communities covering $1.2 trillion worth of property. As for the vaunted private market, for - profit insurance companies write between 180,000 and 200,000 policies t19] in a given year. In other words, that is less than 5% of all flood insurance in the United States. This.federally subsidized program underwrites the other 95 %. Without such insurance, it's not complicated: many waterlogged victims of 2011, whether from record Midwestern floods [20] or Hurricane Irene, would simply have no money to rebuild. Or consider sweltering Texas. In 2011, firefighters responded to 23,519 fires. In all, 2,742 homes Were destroyed by out - of- control wildfires. But government action saved 34,756 other homes. So you decide: Was this another case of wasteful government intervention in the marketplace, or an extremely efficient use of resources? Facing Snowpocalypse Without Plows The early years of this century have already offered a number of examples of how disastrous too little government can be in the face of natural disaster, Katrina - inundated New Orleans in 2005 being perhaps the quintessential case. There are, however, other less noted examples that nonetheless helped concentrate the minds of government planners. For example, in the early spring of 2011, a massive blizzard hit New York City. Dubbed "Snowmageddon" and " Snowpocalypse," the storm arrived in the midst of tense statewide budget negotiations, and a nationwide assault [21] on state workers (and their pensions). In New York, Mayor Mike Bloomberg was pushing for cuts to the sanitation department budget. As the snow piled up, the people tasked with removing it -- sanitation workers -- failed to appear in sufficient numbers. As the city ground to a halt, New Yorkers were left to fend for themselves with nothing but shovels, their cars, doorways, stores, roads all hopelessly buried. Chaos ensued. Though nowhere near as destructive as Katrina, the storm became a case study in too little governance and the all -too- distinct limits of "self- reliance" when nature runs amuck. In the week that followed, even the rich were stranded amid the, mounting . heaps of snow and uncollected garbage. Mayor Bloomberg emerged from the debacle chastened, even though he accused the union of staging a soft strike, a work -to- rule -style slowdown that held the snowbound city hostage. The union denied engaging in any such illegal actions. Whatever the case, the blizzard focused thinking locally on the nature of public workers. It suddenly made sanitation workers less invisible and forced a set of questions: Are public workers really "union fat cats" with "sinecures" gorging at the public trough? Or are they as essential to the basic functions of the city as white blood cells to the health of the human body? Clearly, in snowbound New York it was the latter. No sanitation workers and your city instantly turns chaotic and fills with garbage, leaving street after street lined with the stuff. More broadly the question raised was: Can an individual, a town, a city, even a state really "go it alone" when the weather turns genuinely threatening? Briefly, all the union bashing and attacks on the public sector that had marked that year's state -level budget debates began to sound unhinged. In the Big Apple at least, when Irene came calling that August, Mayor Bloomberg was ready. He wasn't dissing or scolding unions. He wasn't whining about the cost of running a government. He embraced planning, the public sector, public workers, and coordinated collective action. His administration took unprecedented steps [22] like shutting down the subway and moving its trains to higher ground. Good thing they did. Several low -lying subway yards flooded. Had trains been parked there, many millions t23] in public capital might have been lost or damaged. The Secret History of Free Enterprise in America When thinking about the forces of nature and the nature of infrastructure, a slightly longer view of history is instructive. And here's where to start: in the U.S., despite its official pro- market myths, government has always been the main force behind the development of a national infrastructure, and so of the country's overall economic prosperity. One can trace the origins of state participation in the.economy back to at least the founding of the republic: from Alexander Hamilton's First Bank of the United States, which refloated the entire post - revolutionary economy when it bought otherwise worthless colonial debts at face value; to Henry Clay's half- realized program of public investment and planning called the American System; to the New York State - funded Erie Canal, which made the future Big Apple the economic focus of the eastern seaboard; to the railroads, built on government land grants, that took the economy west and tied the nation together; to New Deal programs that helped pulled the country out of the Great Depression and built much of the infrastructure we still use like the Hoover Dam, scores of major bridges, hospitals, schools, and so on; to the government- funded and sponsored interstate highway system launched in the late 1950s; to the similarly funded space race, and beyond. It's simple enough: big government investments (and thus big government) has been central to the remarkable economic dynamism of the country. Government has created roads, highways, railways, ports, the postal system, inland waterways, universities, and telecommunications systems. Government - funded R &D, as well as the buying patterns of government agencies -- (alas!) both - often connected to war and war - making plans -- have driven innovation in everything from textiles and shipbuilding to telecoms, medicine, and high -tech breakthroughs of all sorts. Individuals invent technology, but in the United States it is almost always public money that brings the technology to scale, be it in aeronautics, medicine, computers, or agriculture. Without constant government planning and subsidies, American capitalism simply could not have developed as it did, making ours the world's largest economy. Yes, the entrepreneurs we are taught to venerate have been key to all this, but dig a little deeper and you soon find that most of their oil was on public lands, their technology nurtured or invented thanks to government - sponsored R &D, or supported by excellent public infrastructure and the possibility of hiring well- educated workers produced by a heavily subsidized higher- education system. Just to cite one recent example, the now - familiar Sin voice - activated command s+stem [24] on the new iPhone is based on -- brace yourself -- government - developed technology. And here's a curious thing: everybody more or less knows all this and yet it is almost never acknowledged [25]. If one were to write the secret history of free enterprise in the United States, one would have to acknowledge that it has always been and remains at least a little bit socialist. However, it's not considered proper to discuss government planning in open, realistic, and mature terms, so we fail to talk about what government could -- or rather, must -- do to help us meet the future of climate change. Storm Socialism The onset of ever more extreme and repeated weather events is likely to change how we think about the role of the state. But attitudes toward the Federal Emergency Management Agency (FEMA), which stands behind state and local disaster responses, suggest that we're hardly at that moment yet. In late 2011, with Americans beleaguered by weather disasters, FEMA came under attack [26] from congressional Republicans, eager to starve it of funds. One look at FEMA explains why. Yes, when George W. Bush but [27] an unqualified Ip ayboy [28] at its helm, the agency dealt disastrously with Hurricane Katrina back in 2005. Under better leadership, however, it has been anything but the sinister apparatus of repression portrayed by legions of rightists and conspiracy theorists. FEMA is, in fact, an eminently effective mechanism for planning focused on the public good, not private profit, a form of public insurance and public assistance for Americans struck by disaster. Every year FEMA gives hundreds of millions of dollars to local firefighters and first responders, as well as victims dealing with the aftershock of floods, fires, and the other calamities associated with extreme weather events. The agency's work is structured around what it calls "the disaster life cycle" -- the process through which emergency managers prepare for, respond to, and help others recover from and reduce the risk of disasters. More concretely, FEMA's services include training, planning, coordinating, and funding state and local disaster managers and first responders, grant- making to local governments, institutions, and individuals, and direct emergency assistance that ranges from psychological counseling and medical aid to emergency unemployment benefits. FEMA also subsidizes long -term rebuilding and planning efforts by communities affected by disasters. In other words, it actually represents an excellent use of your tax dollars to provide services aimed at restoring local economic health and so the tax base. The anti - government Right hates FEMA for the same reason that they hate Social Security -- because it works! As it happens, thanks in part to the congressional GOP's sabotage efforts, thousands of FEMA's long -term recovery projects are now on hold, while the cash - strapped agency shifts its resources to deal with only the most immediate crises. This represents a dangerous trend, given what historical statistics tell us about our future. In recent decades, the number of Major Disaster Declarations . by the federal government has been escalating sharply [29]: only 12 in 1961, 17 in 1971, 15 in 1981, 43 in 1991, and in 2011 -- 991 As a result, just when Hurricane Irene bore down on the East Coast, FEMA's disaster relief fund had already been depleted from $2.4 billion as the year, began to a mere $792 million.. Like it or not, government is a huge part of our economy. Altogether, federal, state, and local government activity -- that is collecting fees, taxing, borrowing and then spending on wages, procurement, contracting, grant- making, subsidies and aid -- constitutes about 35% [30] of the gross domestic product. You could say that we already live in a somewhat "mixed economy ": that is, an economy that fundamentally combines private and public economic activity. The intensification of climate change means that we need to acknowledge the chaotic future we face and start planning for it. Think of what's coming, if you will, as a kind of storm socialism. After all, climate scientists believe that atmospheric concentrations of carbon dioxide beyond 350 parts -per- million (ppm) could set off compounding feedback loops and so lock us into runaway climate change. We are already at 392 ppm [31]. Even if we stopped burning all fossil fuels immediately, the disruptive effect of accumulated CO2 in the atmosphere is guaranteed to hammer us for decades. In other words, according to the best -case scenario, we face decades of increasingly chaotic and violent weather. In the face of an unraveling climate system, there is no way that private enterprise alone will meet the threat. And though small "d" democracy and "community' may be key parts of a strong, functional, and fair society, volunteerism and "self - organization" alone will prove as incapable as private enterprise in responding to the massive challenges now beginning to unfold. To adapt to climate change will mean coming together on a large scale and mobilizing society's full range of resources. In other words, Big Storms require Big Government. Who else will save stranded climate refugees, or protect and rebuild infrastructure, or coordinate rescue efforts and plan out the flow and allocation of resources? It will be government that does these tasks or they will not be done at all. Health Care Reform: We're Not Done Yet July 9, 2012 by Healthcare -NOW! Filed under Single -Paver News By Walter Tsou –former health commissioner of Philadelphia. He is aboard adviser to Physicians for a National Health Program The Supreme Court has spoken. The Affordable Care Act, briefly on the ropes, has been blessed as the law of the land. Too many feel that health reform is finally finished and we can move on to the big three issues: the economy, jobs and the deficit. However, because health care is the 800 -pound gorilla of the economy, those issues cannot be solved without more far - reaching health reform. Sorry, lawmakers, but you are going to need to get back in the ring to answer a fundamental question: what is the most cost - effective and constitutional way to finance health care so that we can have quality, affordable health care for everyone? The answer – single -payer national health insurance, also known as an improved Medicare for all – would save America hundreds of billions of dollars annually. And as the Supreme Court reaffirmed, a program of this type, financed by taxes, is definitely constitutional. Outrageously, this simple solution was never discussed in the two contentious years of debate surrounding the creation of the ACA because it was deemed "politically impossible." "Politically impossible" means that the mere utterance of "single payer' would be enough to prompt the medical - industrial complex, especially the pharmaceutical and insurance industries, to funnel millions of dollars in campaign contributions and lobbying money to opponents of real reform and to tea party groups in order to keep the status quo. So America continues to promote the least cost - effective way of financing health care, which means that we spend twice per capita on health care than any other nation on earth. When we were the global leader as we were back in the mid -20th century, we could afford to do this. However, we cannot afford our health care system anymore. It is hopelessly complex, bureaucratic, and outrageously expensive. Employers have shifted the cost to employees and it will only get worse as private insurers raise their premiums. Beyond skyrocketing premiums, about 18 percent of our gross national product is consumed by health care. That figure will rise to 20 percent by the end of the decade. In order to fund this inefficient system, we have borrowed trillions of dollars over the past 50 years, transforming us into the world's greatest debtor nation. No matter who wins the November election, the next administration will be forced to confront the deficit. Unfortunately, it appears that our lawmakers' tunnel vision only offers slashing Social Security, Medicaid and Medicare for the poor and elderly as a way to reduce government spending. That course would be catastrophic. No one seems to want to confront the fact that unless we are willing to embrace an improved Medicare for all, with its streamlined administration and bargaining clout, we have no hope of controlling health care costs, ensuring that our country will remain in debt. Had we adopted a single -payer system 20 years ago, we would have turned our national debt into a surplus today. In a global economy, employers have to add the cost of health insurance to every product or service. When that cost is twice what the world spends, it eventually means that we are pricing our products too high. Manufacturers have moved their major factories overseas because of lower labor costs, of which health insurance is a key component. Entrepreneurs are everywhere in America, but too many are locked into undesirable jobs because they need the health benefits. Those who want to put their toe into the self - employed world stop because of the risk of losing health benefits which is bad for an economy that needs creativity and risk. State and local governments are being weighed down by pension obligations and retiree health benefits. Under a single -payer system, Philadelphia could be freed from the unpredictability of these costs and use those precious dollars for our schools, streets, or public safety. An ABC/Washington Post poll shows that less than 40 percent of Americans view the ACA or the status quo favorably – remarkably low for a "uniquely American" solution. Our politics have robbed us from even discussing a practical, commonsense solution – improved Medicare for all — that we desperately need in America. If the medical - industrial complex continues to win, health care costs will continue to rise, and the American people will be the losers. Avo —why socialism — einstein- 6 -11 -12 From: http: / /www.greanvillepost.com /2010 /07 /18 /albert- einstein- why - socialism/ ALBERT EINSTEIN: Why SOClallsm? 7 -18 -10 IS IT ADVISABLE FOR ONE WHO la NOT AN ExhElo T on economic and social issues to express views on the subject of socialism? I believe for a number of reasons that it is. Let us first consider the question from the point of view of scientific knowledge. It might appear that there are no essential methodological differences between astronomy and economics: scientists in both fields attempt to discover laws of general acceptability for a circumscribed group of phenomena in order to make the interconnection of these phenomena as clearly understandable as possible. But in reality such methodological differences do exist. The discovery of general laws in the field of economics is made difficult by the circumstance that observed economic phenomena are often affected by many factors which are very hard to evaluate separately. In addition, the experience which has accumulated since the beginning of the so- called civilized period of human history has —as is well known —been largely influenced and limited . by causes which are by no means exclusively economic in nature. For example, most of the major states of history owed their existence to conquest. We gratefully acknowledge the generosity of Monthly Review Magazine By Albert Einstein j This essay was originally published in the first issue of Monthly Review (May 1949). The conquering peoples established themselves, legally and economically, as the privileged class of the conquered country. They seized for themselves a monopoly of the land ownership and appointed a priesthood from among their own ranks. The priests, in control of education, made the class division of society into a permanent institution and created a system of values by which the people were thenceforth, to a large extent unconsciously, guided in their social behavior. . But historic tradition is, so to speak, of yesterday; nowhere have we really overcome what Thorstein Veblen called "the predatory phase" of human development. The observable economic facts belong to that phase and even such laws as we can derive from them are not applicable to other phases. Since the real purpose of socialism is precisely to overcome and advance beyond the predatory phase of human development, economic science in its present state can throw little light on the socialist society of the future. Second, socialism is directed towards a social - ethical end. Science, however, cannot create ends and, even less, instill them in human beings; science, at most, can supply the means by which to attain certain ends. But the ends themselves are conceived by personalities with lofty ethical ideals and if these ends are not stillborn, but vital and vigorous —are adopted and carried forward by those many human beings Who, half unconsciously, determine the slow evolution of society. For these reasons, we should be on our guard not to overestimate science and scientific methods when it is a question of human problems; and we should not assume that experts are the only ones who have a right to express themselves on questions affecting the organization of society. Innumerable voices have been asserting for some time now that human society is passing through a crisis, that its stability has been gravely shattered. It is characteristic of such a situation that individuals feel indifferent or even hostile toward the group, small or large, to which they belong. In order to illustrate my meaning, let me record here a personal experience, I recently discussed with an intelligent and well- disposed man the threat of another war, which in my opinion would seriously endanger the existence of mankind, and I remarked that only a supra - national organization would offer protection from that danger. Thereupon my visitor, very calmly and coolly, said to me: "Why are you so deeply opposed to the disappearance of the human race ?" I am sure that as little as a century ago no one would have so lightly made a statement of this kind. It is the statement of a man who has striven in vain to attain an equilibrium within himself and has more or less lost hope of succeeding. It is the expression of a painful solitude and isolation from which so many people are suffering in these days. What is the cause? Is there a way out? It is easy to raise such questions, but difficult to answer them with any degree of assurance. I must try, however, as best I can, although I am very conscious of the fact that our feelings and strivings are often contradictory and obscure and that they cannot be expressed in easy and simple formulas. Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting, strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual can achieve an inner equilibrium and can contribute to the well -being of society. It is quite possible that the relative strength of these two drives is, in the main, fixed by inheritance. But the personality that finally emerges is largely formed by the environment in which a man happens to find himself during his development, by the structure of the society in which he grows up, by the tradition of that society, and by its appraisal of particular types of behavior. The abstract concept "society" means to the individual human being the sum total of his direct and indirect relations to his contemporaries and to all the people of earlier generations. The individual is able to think, feel, strive, and work by himself; but he depends so much upon society —in his physical, intellectual, and emotional existence — that it is impossible to think of him, or to understand him, outside the framework of society. It is "society" which provides man with food, clothing, a home, the tools of work, language, the forms of thought, and most of the content of thought; his life is made possible through the labor and the accomplishments of the many millions past and present who are all hidden behind the small word "society." It is evident, therefore, that the dependence of the individual upon society is a fact of nature which cannot be abolished — just as in the case of ants and bees. However, while the whole life process of ants and bees is fixed down to the smallest detail by rigid, hereditary instincts, the social pattern and interrelationships of human beings are very variable and susceptible to change. Memory, the capacity to make new combinations, the gift of oral communication have made possible developments among human being which are not dictated by biological necessities. Such developments manifest themselves in traditions, institutions, and organizations; in literature; in scientific and engineering accomplishments; in works of art. This explains how it happens that, in a certain sense, man can influence his life through his own conduct, and that in this process conscious thinking and wanting can play a part. Man acquires at birth, through heredity, a biological constitution which we must consider fixed and unalterable, including the natural urges which are characteristic of the human species. In addition, during his lifetime, he acquires a cultural constitution which he adopts from society through communication and through many other types of influences. It is this cultural constitution which, with the passage of time, is subject to change and which determines to a very large extent the relationship between the individual and society. Modern anthropology has taught us, through comparative investigation of so- called primitive cultures, that the social behavior of human beings may differ greatly, depending upon prevailing cultural patterns and the types of organization which predominate in society. It is on this that those who are striving to improve the lot of man may ground their hopes: human beings are not condemned, because of their biological constitution, to annihilate each other or to be at the mercy of a cruel, self - inflicted fate. If we ask ourselves how the structure of society and the cultural attitude of man should be changed in order to make human life as satisfying as possible, we should constantly be conscious of the fact that there are certain conditions which we are unable to modify. As mentioned before, the biological nature of man is, for all practical purposes, not subject to change. Furthermore, technological and demographic developments of the last few centuries have created conditions which are here to stay. In relatively densely settled populations with the goods which are indispensable to their continued existence, an extreme division of labor and a highly - centralized productive apparatus are absolutely necessary. The time — which, looking back, seems so idyllic —is gone forever when individuals or relatively small groups could be completely self- sufficient. It is only a slight exaggeration to say that mankind constitutes even now a planetary community of production and consumption. I have now reached the point where I may indicate briefly what to me constitutes the essence of the crisis of our time. It concerns the relationship of the individual to society. The individual has become more conscious than ever of his dependence upon society. But he does not experience this dependence as a positive asset, as an organic tie, as a protective force, but rather as a threat to his natural rights, or even to his economic existence. Moreover, his position in society is such that the egotistical drives of his make -up are constantly being accentuated, while his social drives, which are by nature weaker, progressively deteriorate. All human beings, whatever their position in society, are suffering from this process of deterioration. Unknowingly prisoners of their own egotism, they feel insecure, lonely, and deprived of the naive, simple, and unsophisticated enjoyment of life. Man can find meaning in life, short and perilous as it is, only through devoting himself to society. The economic anarchy of capitalist society as it exists today is, in my opinion, the real source of the evil. We see before us a huge community of producers the members of which are unceasingly striving to deprive each other of the fruits of their collective labor —not by force, but on the whole in faithful compliance with legally established rules. In this respect, it is important to realize that the means of production —that is to say, the entire productive capacity that is needed for producing consumer goods as well as additional capital goods —may legally be, and for the most part are, the private property of individuals. For the sake of simplicity, in the discussion that follows I shall call "workers" all those who do not share in the ownership of the means of production — although this does not quite correspond to the customary use of the term. The owner of the means of production is in a position to purchase the labor power of the worker. By using the means of production, the worker produces new goods which become the property of the capitalist. The essential point about this process is the relation between what the worker produces and what he is paid, both measured in terms of real value. Insofar as the labor contract is "free," what the worker receives is determined not by the real value of the goods he produces, but by his minimum needs and by the capitalists' requirements for labor power in relation to the number of workers competing for jobs. It is important to understand that even in theory the payment of the worker is not determined by the value of his product. Private capital tends to become concentrated in few hands, partly because of competition among the capitalists, and partly because technological development and the increasing division of labor encourage the formation of larger units of production at the expense of smaller ones. The result of these developments is an oligarchy of private capital the enormous power of which cannot be effectively checked even by a democratically organized political society. This is true since the members of legislative bodies are selected by political parties, largely financed or otherwise influenced by private capitalists who, for all practical purposes, separate the electorate from the legislature. The consequence is that the representatives of the people do not in fact sufficiently protect the interests of the underprivileged sections of the population. Moreover, under existing conditions, private capitalists inevitably control, directly or indirectly, the main sources of information (press, radio, education). It is thus extremely difficult, and indeed in most cases quite impossible, for the individual citizen to come to objective conclusions and to make intelligent use of his political rights. The situation prevailing in an economy based on the private ownership of capital is thus characterized by two main principles: first, means of production (capital) are privately owned and the owners dispose of them as they see fit; second, the labor contract is free. Of course, there is no such thing as a pure capitalist society in this sense. In particular, it should be noted that the workers, through long and bitter political struggles, have succeeded in securing a somewhat improved form of the "free labor contract" for certain categories of workers. But taken as a whole, the present day economy does not differ much from "pure" capitalism. Production is carried on for profit, not for use. There is no provision that all those able and willing to work will always be in a position to find employment; an "army of unemployed" almost always exists. The worker is constantly in fear of losing his job. Since unemployed and poorly paid workers do not provide a profitable market, the production of consumers' goods is restricted, and great hardship is the consequence. Technological progress frequently results in more unemployment rather than in an easing of the burden of work for all. The profit motive, in conjunction with competition among capitalists, is responsible for an instability in the accumulation and utilization of capital which leads to increasingly severe depressions. Unlimited competition leads to a huge waste of labor, and to that crippling of the social consciousness of individuals which I mentioned before. This crippling of individuals I consider the worst evil of capitalism. Our whole educational system suffers from this evil. An exaggerated competitive attitude is . inculcated into the student, who is trained to worship acquisitive success as a preparation for his future career. I am convinced there is only one way to eliminate these grave evils, namely through the establishment of a socialist economy, accompanied by an educational system which would be oriented toward social goals. In such an economy, the means of production are owned by society itself and are utilized in a planned fashion. A planned economy, which adjusts production to the needs of the community, would distribute the work to be done among all those able to work and would guarantee a livelihood to every man, woman, and child. The education of the individual, in addition to promoting his own innate abilities, would attempt to develop in him a sense of responsibility for his fellow men in place of the glorification of power, and success in our present society. Nevertheless, it is necessary to remember that a planned economy is not yet socialism. A planned economy as such may be accompanied by the complete enslavement of the individual. The achievement of socialism requires the solution of some extremely difficult socio - political problems: how is it possible, in view of the far - reaching centralization of political and economic power, to prevent bureaucracy from becoming all- powerful and overweening? How can the rights of the individual be protected and therewith a democratic counterweight to the power of bureaucracy be assured? Clarity about the aims and problems of socialism is of greatest significance. in our age of transition. Since, under present circumstances, free and unhindered discussion of these problems has come under a powerful taboo, I consider the foundation of this magazine to be an important public service. ALBERT EINSTEIN needs no introduction. His faith in socialism was the kind of "detail" about his biography that the media gatekeepers carefully kept out of sight. Article— UltraRight Stranglehold-9-20-11- From: http: / /www. truth - out.org /goodbye -all- reflections -gop- operative- who - left- culUl314907779 Goodbye to All That: Reflections of a GOP Operative Who Left the Cult, Saturday 3 September 2011 by: Mike Lofgren, Truthouf I News Analysis N(Photo: Carolyn Tiry I Flickr) Barbara Stanwyck: "We're both rotten! ", Fred MacMurray: "Yeah - only you're a little more rotten." "Double Indemnity" (1944) Those lines of dialogue from a classic film noir sum up the state of the two political parties in contemporary America. Both parties are rotten - how could they not be, given the complete infestation of the political system by corporate money on a scale that now requires a presidential candidate to raise upwards of a billion dollars to be competitive in the general election? Both parties are captives to corporate loot. The main reason the Democrats' health care bill will be a budget buster once it fully phases in is the Democrats' rank capitulation to corporate interests - no single -payer system, in order to mollify the insurers; and no negotiation of drug prices, a craven surrender to Big Pharma. But both parties are not rotten in quite the same way. The Democrats have their share of machine politicians, careerists, corporate bagmen, egomaniacs and kooks. Nothing, however, quite matches the modern GOP. To those millions of Americans who have finally begun paying attention to politics and watched with exasperation the tragicomedy of the debt ceiling extension, it may have come as a shock that the Republican Party is so full of lunatics. To be sure, the party, like any political party on earth, has always had its share of crackpots, like Robert K. Doman or William E. Dannemeyer. But the crackpot outliers of two decades ago have become the vital center today: Steve King, Michele Bachman (now a leading presidential candidate as well), Paul Broun, Patrick McHenry, Virginia Foxx, Louie Gohmert, Allen West. The Congressional directory now reads like a casebook of lunacy. It was this cast of characters and the pernicious ideas they represent that impelled me to end a nearly 30 -year career as a professional staff member on Capitol Hill. A couple of months ago, I retired; but I could see as early as last November that the Republican Party would use the debt limit vote, an otherwise routine legislative procedure that has been used 87 times since the end of World War 11, in order to concoct an entirely artificial fiscal crisis. Then, they would use that fiscal crisis to get what they wanted, by literally holding the US and global economies as hostages. The debt ceiling extension is not the only example of this sort of political terrorism. Republicans were willing to lay off 4,000 Federal Aviation Administration (FAA) employees, 70,000 private construction workers and let FAA safety inspectors work without pay, in fact, forcing them to pay for their own work - related travel - how prudent is that? - in order, to strong arm some union - busting provisions into the FAA reauthorization. Everyone knows that in a hostage situation, the reckless and amoral actor has the negotiating upper hand over the cautious and responsible actor because the latter is actually concerned about the life of the hostage, while the former does not care. This fact, which ought to be obvious, has nevertheless caused confusion among the professional pundit class, which is mostly still stuck in the Bob Dole era in terms of its orientation. For instance, Ezra Klein wrote of his puzzlement over the fact that while House Republicans essentially won the debt ceiling fight, enough of them were sufficiently dissatisfied that they might still scuttle the deal. Of course they might - the attitude of many freshman Republicans to national default was "bring it on!" It should have been evident to clear -eyed observers that the Republican Party is becoming less and less like a traditional political party in a representative democracy and becoming more like an apocalyptic cult, or one of the intensely ideological authoritarian parties of 20th century Europe. This trend has several implications, none of them pleasant. In his "Manual of Parliamentary Practice," Thomas Jefferson wrote that it is less important that every rule and custom of a legislature be absolutely justifiable in a theoretical sense, than that they should be generally acknowledged and honored by all parties. These include unwritten rules, customs and courtesies that lubricate the legislative machinery and keep governance a relatively civilized procedure: The US Senate has more complex procedural rules than any other legislative body in the world; many of these rules are contradictory, and on any given day, the Senate parliamentarian may issue a ruling that contradicts earlier rulings on analogous cases. The only thing that can keep the Senate functioning is collegiality and good faith. During periods of political consensus, for instance, the World War 11 and early post -war eras, the Senate was a "high functioning" institution: filibusters were rare and the body was legislatively productive. Now, one can no more picture the current Senate producing the original Medicare Act than the old Supreme Soviet having legislated the Bill of Rights. Far from being a rarity, virtually every bill, every nominee for Senate confirmation and every routine procedural motion is now subject to a Republican filibuster. Under the circumstances, it is no wonder that Washington is gridlocked: legislating has now become war minus the shooting, something one could have observed 80 years ago in the Reichstag of the Weimar Republic, As Hannah Arendt observed, a disciplined minority of totalitarians can use the instruments of democratic government to undermine democracy itself. John P. Judis sums up the modern GOP this way: "Over the last four decades, the Republican Party has transformed from a loyal opposition into an insurrectionary party that flouts the law when it is in the majority and threatens disorder when it is the minority. It is the party of Watergate and Iran - Contra, but also of the government shutdown in 1995 and the impeachment trial of 1999. If there is an earlier American precedent for today's Republican Party, it is the antebellum Southern Democrats of John Calhoun who threatened to nullify, or disregard, federal legislation they objected to and who later led the fight to secede from the union over slavery." A couple of years ago, a Republican committee staff director told me candidly (and proudly) what the method was to all this obstruction and disruption. Should Republicans succeed in obstructing the Senate from doing its job, it would further lower Congress's generic favorability rating among the American people. By sabotaging the reputation of an institution of government, the party that is programmatically against government would come out the relative winner. A deeply cynical tactic, to be sure, but a psychologically insightful one that plays on the weaknesses both of the voting public and the news media. There are tens of millions of low- information voters who hardly know which party controls which branch of government, let alone which party is pursuing a particular legislative tactic. These voters' confusion over who did what allows them to form the conclusion that "they are all crooks," and that "government is no good," further leading them to think, "a plague on both your houses" and "the parties are like two kids in a school yard." This ill- informed public cynicism, in its turn, further intensifies the long -term decline in public trust in government that has been taking place since the early 1960s - a distrust that has been stoked by Republican rhetoric at every turn ( "Government is the problem," declared Ronald Reagan in 1980). The media are also complicit in this phenomenon. Ever since the bifurcation of electronic media into a more or less respectable "hard news" segment and a rabidly ideological talk radio and cable TV political propaganda arm, the "respectable" media have been terrified of any criticism for perceived bias. Hence, they hew to the practice of false evenhandedness. Paul Krugman has skewered this tactic as being the "centrist cop- out." "I joked long ago," he says, "that if one party declared that the earth was flat, the headlines would read 'Views Differ on Shape of Planet. "' Inside - the - Beltway wise guy Chris Cillizza merely proves Krugman right in his Washington Post analysis of "winners and losers" in the debt ceiling impasse. He wrote that the institution of Congress was a big loser in the fracas, which is, of course, correct, but then he opined: "Lawmakers - bless their hearts - seem entirely unaware of just how bad they looked during this fight and will almost certainly spend the next few weeks (or months) congratulating themselves on their tremendous magnanimity." Note how the pundit's ironic deprecation falls like the rain on the just and unjust alike, on those who precipitated the needless crisis and those who despaired of it. He seems oblivious that one side - or a sizable faction of one side - has deliberately attempted to damage the reputation of Congress to achieve its political objectives. This constant drizzle of "there the two parties go again!" stories out of the news bureaus, combined with the hazy confusion of low- information voters, means that the long -term Republican strategy of undermining confidence in our democratic institutions has reaped electoral dividends. The United States has nearly the lowest voter participation among Western democracies; this; again, is a consequence of the decline of trust in government institutions - if government is a racket and both parties are the same, why vote? And if the uninvolved middle declines to vote, it increases the electoral clout of a minority that is constantly being whipped into a lather by three hours daily of Rush Limbaugh or Fox News. There were only 44 million Republican voters in the 2010 mid -term elections, but they effectively canceled the political results of the election of President Obama by 69 million voters. This tactic of inducing public distrust of government is not only cynical, it is schizophrenic. For people who profess to revere the Constitution, it is strange that they so caustically denigrate the very federal government that is the material expression of the principles embodied in that document. This is not to say that there is not some theoretical limit to the size or intrusiveness of government; I would be the first to say there are such limits, both fiscal and Constitutional. But most Republican officeholders seem strangely uninterested in the effective repeal of Fourth Amendment protections by the Patriot Act, the weakening of habeas corpus and self- incrimination protections in the public hysteria following 9111 or the unpalatable fact that the United States has the largest incarcerated population of any country on earth. If anything, they would probably opt for more incarcerated persons, as imprisonment is a profit center for the prison privatization industry, which is itself a growth center for political contributions to these same politicians.[1] Instead, they prefer to rail against those government programs that actually help people. And when a program is too popular to attack directly, like Medicare or Social Security, they prefer to undermine it by feigning an agonized concern about the deficit. That concern, as we shall see, is largely fictitious. Undermining Americans' belief in their own institutions of self - government remains a prime GOP electoral strategy. But if this technique falls short of producing Karl Rove's dream of 30 years of unchallengeable one -party rule (as all such techniques always fall short of achieving the angry and embittered true believer's New Jerusalem), there are other even less savory techniques upon which to fall back. Ever since Republicans captured the majority in a number of state legislatures last November, they have systematically attempted to make it more difficult to vote: by onerous voter ID requirements (in Wisconsin, Republicans have legislated photo IDs while simultaneously shutting Department of Motor Vehicles (DMV) offices in Democratic constituencies while at the same time lengthening the hours of operation of DMV offices in GOP constituencies); by narrowing registration periods; and by residency requirements that may disenfranchise university students. This legislative assault is moving in a diametrically opposed direction to 200 years of American history, when the arrow of progress pointed toward more political participation by more citizens. Republicans are among the most shrill in self- righteously lecturing other countries about the wonders of democracy; exporting democracy (albeit at the barrel of a gun) to the Middle East was a signature policy of the Bush administration. But domestically, they don't want those people voting. You can probably guess who those people are. Above all, anyone not likely to vote Republican. As Sarah Palin would imply, the people who are not Real Americans. Racial minorities. Immigrants. Muslims. Gays. Intellectuals. Basically, anyone who doesn't look, think, or talk like the GOP base. This must account, at least to some degree, for their extraordinarily vitriolic hatred of President Obama. I have joked in the past that the main administration policy that Republicans object to is Obama's policy of being black.[2] Among the GOP base, there is constant harping about somebody else, some "other," who is deliberately, assiduously and with malice aforethought subverting the Good, the True and the Beautiful: Subversives. Commies. Socialists. Ragheads. Secular humanists. Blacks. Fags. Feminazis. The list may change with the political needs of the moment, but they always seem to need a scapegoat to hate and fear. It is not clear to me how many GOP officeholders believe this reactionary and paranoid claptrap. I would bet that most do not. But they cynically feed the worst instincts of their fearful and angry low- information political base with a nod and a wink. During the disgraceful circus of the "birther" issue, Republican politicians subtly stoked the fires of paranoia by being suggestively equivocal - "I take the president at his word" - while never unambiguously slapping down the myth. John Huntsman was the first major GOP figure forthrightly to refute the birther calumny - albeit after release of the birth certificate. I do not mean to place too much emphasis on racial animus in the GOP. While it surely exists, it is also a fact that Republicans think that no Democratic president could conceivably be legitimate. Republicans also regarded Bill Clinton as somehow, in some manner, twice fraudulently elected (well do I remember the elaborate conspiracy theories that Republicans traded among themselves). Had it been Hillary Clinton, rather than Barack Obama, who had been elected in 2008, 1 am certain we would now be hearing, in lieu of the birther myths, conspiracy theories about Vince Foster's alleged murder. The reader may think that I am attributing Svengali -like powers to GOP operatives able to manipulate a zombie base to do their bidding. tt is more complicated than that. Historical circumstances produced the raw material: the deindustrialization and financialization of America since about 1970 has spawned an increasingly downscale white middle class - without job security (or even without jobs), with pensions and health benefits evaporating and with their principal asset deflating in the collapse of the housing bubble. Their fears are not imaginary; their standard of living is shrinking. What do the Democrats offer these people? Essentially nothing. Democratic Leadership Council -style "centrist" Democrats were among the biggest promoters of disastrous trade deals in the 1990s that outsourced jobs abroad: NAFTA, World Trade Organization, permanent most - favored - nation status for China. At the same time, the identity politics /lifestyle wing of the Democratic Party was seen as a too illegal immigrant - friendly by downscaled and outsourced whites.[3] While Democrats temporized, or even dismissed the fears of the white working class as racist or nativist, Republicans went to work. To be sure, the business wing of the Republican Party consists of the most energetic outsourcers, wage cutters and hirers of sub - minimum wage immigrant labor to be found anywhere on the globe. But the faux - populist wing of the party, knowing the mental compartmentalization that occurs in most low- information voters, played on the fears of that same white working class to focus their anger on scapegoats that do no damage to corporations' bottom" lines; instead of raising the minimum wage, let's build a wall on the Southern border (then hire a defense contractor to incompetently manage it). Instead of predatory bankers, it's evil Muslims. Or evil gays. Or evil abortionists. How do they manage to do this? Because Democrats ceded the field. Above all, they do not understand language. Their initiatives are posed in impenetrable policy- speak: the Patient Protection and Affordable Care Act. The what? - can anyone even remember it? No wonder the pejorative "Obamacare" won out. Contrast that with the Republicans' Patriot Act. You're a patriot, aren't you? Does anyone at the GED level have a clue what a Stimulus Bill is supposed to be? Why didn't the White House call it the Jobs Bill and keep pounding on that theme? You now that Social Security and Medicare are in jeopardy when even Democrats refer to them as entitlements. "Entitlement" has a negative sound in colloquial English: somebody who is "entitled" selfishly claims something he doesn't really deserve. Why not call them "earned benefits," which is what they are because we all contribute payroll taxes to fund them? That would never occur to the Democrats. Republicans don't make that mistake; they are relentlessly on message: it is never the "estate tax," it is the "death tax." Heaven forbid that the Walton family should give up one penny of its $86- billion fortune. All of that lucre is necessary to ensure that unions be kept out of Wal -Mart, that women employees not be promoted_ and that politicians be kept on a short leash. It was not always thus. It would have been hard to find an uneducated farmer during the depression of the 1890s who did not have a very accurate idea about exactly which economic interests were shafting him. An unemployed worker in a breadline in 1932 would have felt little gratitude to the Rockefellers or the Mellons. But that is not the case in the present economic crisis. After a riot of unbridled greed such as the world has not seen since the conquistadors' looting expeditions and after an unprecedented broad and rapid transfer of wealth upward by Wall Street and its corporate satellites, where is the popular anger directed, at least as depicted in the media? At "Washington spending" - which has increased primarily to provide unemployment compensation, food stamps and Medicaid to those economically damaged by the previous decade's corporate saturnalia. Or the popular rage is harmlessly diverted against pseudo- issues: death panels, birtherism, gay marriage, abortion, and so on, none of which stands to dent the corporate bottom line in the slightest. Thus far, I have concentrated on Republican tactics, rather than. Republican beliefs, but the tactics themselves are important indicators of an absolutist, authoritarian mindset that is increasingly hostile to the democratic values of reason, compromise and conciliation. Rather, this mindset seeks polarizing division (Karl Rove has been very explicit that this is his principal campaign strategy), conflict and the crushing of opposition. As for what they really believe, the Republican Party of 2011 believes in three principal tenets I have laid out below. The rest of their platform one may safely dismiss as window dressing: 1. The GOP cares solely and exclusively about its rich contributors. The party has built a whole catechism on the protection and further enrichment of America's plutocracy. Their caterwauling about deficit and debt is so much eyewash to con the public. Whatever else President Obama has accomplished (and many of his purported accomplishments are highly suspect), his $4- trillion deficit reduction package did perform the useful service of smoking out Republican hypocrisy. The GOP refused, because it could not abide so much as a one -tenth of one percent increase on the tax rates of the Walton family or the Koch brothers, much less a repeal of the carried interest rule that permits billionaire hedge fund managers to pay income tax at a lower effective rate than cops or nurses. Republicans finally settled on a deal that had far less deficit reduction - and even less spending reduction! - than Obama's offer, because of their iron resolution to protect at all costs our society's overclass. Republicans have attempted to camouflage their amorous solicitude for billionaires with a fog of misleading rhetoric. John Boehner is fond of saying, "we won't raise anyone's taxes," as if the take -home pay, of an Olive Garden waitress were inextricably bound up with whether Warren Buffett pays his capital gains as ordinary income or at a lower rate. Another chestnut is that millionaires and billionaires are "job creators." US corporations have just had their most profitable quarters in history; Apple, for one, is sitting on $76 billion in cash, more than the GDP of most countries. So, where are the jobs? Another smokescreen is the "small business" meme, since standing up for Mom's and Pop's corner store is politically more attractive than to be seen shilling for a megacorporation. Raising taxes on the wealthy will kill small business' ability to hire; that is the GOP dirge every time Bernie Sanders or some Democrat offers an amendment to increase taxes on incomes above $1 million. But the number of small businesses that have a net annual income over a million dollars is de minimis, if not by definition impossible (as they would no longer be small businesses). And as data from the Center for Economic and Policy Research have shown, small businesses account for only 7.2 percent of total US employment, a significantly smaller share of total employment than in most Organisation for Economic Co- operation and Development (OECD) countries. Likewise, Republicans have assiduously spread the myth that Americans are conspicuously overtaxed. But compared to other OECD countries, the effective rates of US taxation are among the lowest. In particular, they point to the top corporate income rate of 35 percent as being confiscatory Bolshevism. But again, the effective rate is much lower. Did GE pay 35 percent on 2010 profits of $14 billion? No, it paid zero. When pressed, Republicans make up misleading statistics to "prove" that the America's fiscal burden is being borne by the rich and the rest of us are just freeloaders who don't appreciate that fact. "Half of Americans don't pay taxes" is a perennial meme. But what they leave out is that that statement refers to federal income taxes. There are millions of people who don't pay income taxes, but do contribute payroll taxes - among the most regressive forms of taxation. But according to GOP fiscal theology, payroll taxes don't count. Somehow, they have convinced themselves that since payroll taxes go into trust funds, they're not real taxes. Likewise, state and local sales taxes apparently don't count, although their effect on a poor person buying necessities like foodstuffs is far more regressive than on a millionaire. All of these half truths and outright lies have seeped into popular culture via the corporate -owned business press. Just listen to CNBC for a few hours and you will hear most of them in one form or another. More important politically, Republicans', myths about taxation have been internalized by millions of economically downscale "values voters," who may have been attracted to the GOP for other reasons (which I will explain later), but who now accept this misinformation as dogma. And when misinformation isn't enough to sustain popular support for the GOP's agenda, concealment is needed, One fairly innocuous provision in the Dodd -Frank financial reform bill requires public companies to make a more transparent disclosure of CEO compensation, including bonuses. Note that it would not limit the compensation, only require full disclosure. Republicans are hell -bent on repealing this provision. Of course; it would not serve Wall Street interests if the public took an unhealthy interest in the disparity of their own incomes as against that of a bank CEO. As Spencer Bachus, the Republican chairman of the House Financial Services Committee, says, "In Washington, the view is that the banks are to be regulated and my view is that Washington and the regulators are there to serve the banks." 2. They worship at the altar of Mars. While the me -too Democrats have seta horrible example of keeping up with the Joneses with respect to waging wars, they can never match GOP stalwarts such as John McCain or Lindsey Graham in their sheer, libidinous enthusiasm for invading other countries. McCain wanted to mix it up with Russia - a nuclear -armed state - during the latter's conflict with Georgia in 2008 (remember? - "we are all Georgians now," a slogan that did not, fortunately, catch on), while Graham has been persistently agitating for attacks on Iran and intervention in Syria. And these are not fringe elements of the party; they are the leading "defense experts," who always get tapped for the Sunday talk shows. About a month before Republicans began holding a gun to the head of the credit markets to get trillions of dollars of cuts, these same Republicans passed a defense appropriations bill that increased spending by $17 billion over the prior year's defense appropriation. To borrow Chris Hedges' formulation, war is the force that gives meaning to their lives. A cynic might conclude that this militaristic enthusiasm is no more complicated than the fact that Pentagon contractors spread a lot of bribery money around Capitol Hill. That is true, but there is more to it than that. It is not necessarily even the fact that members of Congress feel they are protecting constituents' jobs. The wildly uneven concentration of-defense contracts and military bases nationally means that some areas, like Washington, DC, and San Diego, are heavily dependent on Department of Defense (DOD) spending. But there are many more areas of the country whose net balance is negative: the citizenry pays more in taxes to support the Pentagon than it receives back in local contracts. And the economic justification for Pentagon spending is even more fallacious when one considers that the $700 billion annual DOD budget creates comparatively few jobs. The days of Rosie the Riveter are long gone; most weapons projects now require very little touch labor. Instead, a disproportionate share is siphoned off into high -cost research and development (from which the civilian economy benefits little); exorbitant management expenditures, overhead and out - and -out padding; and, of course, the money that flows back into the coffers of.political campaigns. A million dollars appropriated for highway construction would create two to three times as many jobs as a million dollars appropriated for Pentagon weapons procurement, so the jobs argument is ultimately specious. Take away the cash nexus and there still remains a psychological predisposition toward war and militarism on the part of the GOP. This undoubtedly arises from a neurotic need to demonstrate toughness and dovetails perfectly with the belligerent tough -guy pose one constantly hears on right -wing talk radio. Militarism springs from the same psychological deficit that requires an endless series of enemies, both foreign and domestic. The results of the last decade of unbridled militarism and the Democrats' cowardly refusal to reverse it[4], have been disastrous both strategically and fiscally. It has made the United States less prosperous, less secure and less free. Unfortunately, the militarism and the promiscuous intervention it gives rise to are only likely to abate when the Treasury is exhausted, just as it happened to the Dutch Republic and the British Empire. 3. Give me that old time religion. Pandering to fundamentalism is a full -time vocation in the GOP. Beginning in the 1970s, religious cranks ceased simply to be a minor public nuisance in this country and grew into the major element of the Republican rank and file. Pat Robertson's strong showing in the 1988 Iowa Caucus signaled the gradual merger of politics and religion in the party. The results are all around us: if the American people poll more like Iranians or Nigerians than Europeans or Canadians on questions of evolution versus creationism, scriptural inerrancy, the existence of angels and demons, and so forth, that result is due to the rise of the religious right, its insertion into the public sphere by the Republican Party and the consequent normalizing of formerly reactionary or quaint beliefs. Also around us is a prevailing anti - intellectualism and hostility to science; it is this group that defines "low- information voter" - or, perhaps, "misinformation voter.' The Constitution to the contrary notwithstanding, there is now a de facto religious test for the presidency: major candidates are encouraged (or coerced) to "share their feelings" about their "faith" in a revelatory speech; or, some televangelist like Rick Warren dragoons the candidates (as he did with Obama and McCain in 2008) to debate the finer points of Christology, with Warren himself, of course, as the arbiter. Politicized religion is also the sheet anchor of the culture wars. But how did the whole toxic stew of GOP beliefs - economic royalism, militarism and culture wars cum fundamentalism - come completely to displace an erstwhile civilized Eisenhower Republicanism? It is my view that the rise of politicized religious fundamentalism (which is a subset of the decline of rational problem solving in America) may have been the key ingredient of the takeover of the Republican Party. For politicized religion provides a substrate of beliefs that rationalizes - at least in the minds of followers - all three of the GOP's main tenets. Televangelists have long espoused the health- and - wealth /name -it- and -claim it gospel. If you are wealthy, it is a sign of God's favor. If not, too bad! But don't forget to tithe in any case. This rationale may explain why some economically downscale whites defend the prerogatives of billionaires. The GOP's fascination with war is also connected with the fundamentalist mindset. The Old Testament abounds in tales of slaughter - God ordering the killing of the Midianite male infants and enslavement of the balance of the population, the divinely- inspired genocide of the Canaanites, the slaying of various miscreants with the jawbone of an ass - and since American religious fundamentalist seem to prefer the Old Testament to the New (particularly that portion of the New Testament known as the Sermon on the Mount), it is but a short step to approving war as a divinely inspired mission. This sort of thinking has led, inexorably, to such phenomena as Jerry Falwell once writing that God is Pro -War. . It is the apocalyptic frame of reference of fundamentalists, their belief in an imminent Armageddon, that psychologically conditions them to steer this country into conflict, not only on foreign fields (some evangelicals thought Saddam was the Antichrist and therefore a suitable target for cruise missiles), but also in the realm of domestic political controversy. It is hardly surprising that the most adamant proponent of the view that there was no debt ceiling problem was Michele Bachmann, the darling of the fundamentalist right. What does it matter, anyway, if the country defaults? - we shall presently abide in the bosom of the Lord. Some liberal writers have opined that the different socio- economic perspectives separating the "business" wing of the GOP and the religious right make it an unstable coalition that could crack. I am not so sure. There is no fundamental disagreement on which direction the two factions want to take the country, merely how far in that direction they want to take it. The plutocrats would drag us back to the Gilded Age, the theocrats to the Salem witch trials. In any case, those consummate plutocrats, the Koch brothers, are pumping large sums of money into Michele Bachman's presidential campaign, so one ought not make too much of a potential plutocrat- theocrat split. Thus, the modern GOP; it hardly seems conceivable that a Republican could have written the following: "Should any political party attempt to abolish social security, unemployment insurance and eliminate labor laws and farm programs, you would not hear of that party again in our political history. There is a tiny splinter group, of course, that believes you can do these things. Among them are H. L. Hunt (you possibly know his background), a few other Texas oil millionaires and an occasional politician or business man from other areas. Their number is negligible and they are stupid." (That was President Eisenhower, writing to his brother Edgar in 1954.) It is this broad and ever - widening gulf between the traditional Republicanism of an Eisenhower and the quasi - totalitarian cult of a Michele Bachmann.that impelled my departure from Capitol Hill. It is not in my pragmatic nature to make a heroic gesture of self - immolation, or to make lurid revelations of personal martyrdom in the manner of David Brock. And I will leave a more detailed dissection of failed Republican economic policies to my fellow apostate Bruce Bartlett. I left because I was appalled at the headlong rush of Republicans, like Gadarene swine, to embrace policies that are deeply damaging to this country's future; and contemptuous of the feckless, craven incompetence of Democrats in their half- hearted attempts to stop them. And, in truth, I left as an act of rational self- interest. Having gutted private- sector pensions and health benefits as a result of their embrace of outsourcing, union busting and "shareholder value," the GOP now thinks it is only fair that public- sector workers give up their pensions and benefits, too.. Hence the intensification of the GOP's decades -long campaign of scorn against government workers. Under the circumstances, it is simply safer to be a current retiree rather than a prospective one. If you think Paul Ryan and his Ayn Rand - worshipping colleagues aren't after your Social Security and Medicare, I am here to disabuse you of your naivete.[5] They will move heaven and earth to force through tax cuts that will so starve the government of revenue that they will be "forced" to make "hard choices" - and that doesn't mean repealing those very same tax cuts, it means cutting the benefits for which you worked. During the week that this piece was written, the debt ceiling fiasco reached its conclusion. The economy was already weak, but the GOP's disgraceful game of chicken roiled the markets even further. Foreigners could hardly believe it: Americans' own crazy political actions were destabilizing the safe -haven status of the dollar. Accordingly, during that same week, over one trillion dollars worth of assets evaporated on financial markets. Russia and China have stepped up their advocating that the dollar be replaced as the global reserve currency - a move as consequential and disastrous for US interests as any that can be imagined. If Republicans have perfected a new form of politics that is successful electorally at the same time that it unleashes major policy disasters, it means twilight both for the democratic process and America's status as the world's leading power. Footnotes: [1] 1 am not exaggerating for effect. A law passed in 2010 by the Arizona legislature mandating arrest and incarceration of suspected illegal aliens was actually drafted by the American Legislative Exchange Council, a conservative business front group that drafts "model" legislation on behalf of its corporate sponsors. The draft legislation in question was written for the private prison lobby, which sensed a growth opportunity in imprisoning more people. [2] 1 am not a supporter of Obama and object to a number of his foreign and domestic policies. But when he took office amid the greatest financial collapse in 80 years, I wanted him to succeed, so that the country I served did not fail. But already in 2009, Mitch McConnell, the Senate Republican leader, declared that his greatest legislative priority was - jobs for Americans? Rescuing the financial system? Solving the housing collapse? - no, none of those things. His top priority was to ensure that Obama should be a one -term president. Evidently Senator McConnell hates Obama more than he loves his country. Note that the mainstream media have lately been hailing McConnell as "the adult in the room," presumably because he is less visibly unstable than the Tea Party freshmen [3] This is not a venue for immigrant bashing. It remains a fact that outsourcing jobs overseas, while insourcing sub - minimum,wage immigrant labor, will exert downward pressure on US wages. The consequence will be popular anger, and failure to address that anger will result in a downward wage spiral and a breech of the social compact, not to mention a rise in nativism and other reactionary impulses. It does no good to claim that these economic consequences are an inevitable result of globalization; Germany has somehow managed to maintain a high -wage economy and a vigorous industrial base. [4] The cowardice is not merely political. During the past ten years, I have observed that Democrats are actually growing afraid of Republicans. In a quirky and flawed, but insightful, little book, "Democracy and Populism: Fear and Hatred," John Lukacs concludes that the left fears, the right hates. [5] The GOP cult of Ayn Rand is both revealing and mystifying. On the one hand, Rand's tough guy, every- man - for - himself posturing is a natural fit because it puts a philosophical gloss on the latent saciopathy so prevalent among the hard right. On the other, Rand exclaimed at every opportunity that she was a militant atheist who felt nothing but contempt for Christianity. Apparently, the ignorance of most fundamentalist "values voters" means that GOP candidates who enthuse over Rand at the same time they thump their Bibles never have to explain this stark contradiction. And I imagine a Democratic officeholder would have a harder time explaining why he named his offspring "Marx" than a GOP incumbent would in rationalizing naming his kid "Rand." This work by Truthout is licensed under a Creative Commons Attribution- Noncommerciat 3.0 United States License. Emailt Mike Lofgren retired on June 17 after 28 years as a Congressional staffer. He served 16 years as a professional staff member on the Republican side of both the House and Senate Budget Committees. Avo— Politics— Lakoff —a framing memo- 10 -20 -11 From: http: / /www.nationofchange.org/ framing- memo - occupy -wall- street- 1319120927 A Framing Memo for Occupy Wall Street op.ed by George Lakoff I was asked weeks ago by some in the Occupy Wall Street movement to make suggestions for how to frame the movement. I have hesitated so far, because I think the movement should be framing itself. It's a general principle: Unless you frame yourself, others will frame you — the media, your enemies, your competitors, your well- meaning friends. I have so far hesitated to offer suggestions. But the movement appears to maturing and entering a critical time when small framing errors could have large negative consequences. So I thought it might be helpful to accept the invitation and start a discus- sion of.how the movement might think about framing itself. About framing: It's normal. Everybody engages in it all the time. Frames are just structures of thought that we use every day. All words in all languages are defined in terms of frame - circuits in the brain. But, ultimately, framing is about ideas, about how we see the world, which determines how we act. In politics, frames are part of competing moral systems that are used in political discourse and in charting political action. In short, framing is a moral enterprise: it says what the character of a movement is. All politics is moral. Political fig- ures and movements always make policy recommendations claiming they are the right things to do. No political figure ever says, do what I say because it's wrong! Or because it doesn't matter! Some moral principles or other lie behind every politi- cal policy agenda. Two Moral Framing Systems in Politics Conservatives have figured out their moral basis and you see it on Wall Street: It includes: The primacy of self- inter- est. Individual responsibility, but not social responsibility. Hierarchical authority based on wealth or other forms of power. A . moral hierarchy of who is "deserving," defined by success. And the highest principle is the primacy of this moral system it- self, which goes beyond Wall Street and the economy to other arenas: family life, social life, religion, foreign policy, and es- pecially government. Conservative "democracy" is seen as a system of governance and elections that fits this model. Though OWS concerns go well beyond financial issues, your target is right: the application of these principles in Wall Street is central, since that is where the money comes from for elections, for media, and for right -wing policy- making institutions of all sorts on all issues. The alternative view of democracy is progressive: Democracy starts with citizens caring about one another and act- ing responsibly on that sense of care, taking responsibility both for oneself and for one's family, community, country, people in general; and the planet. The role of government is to protect and empower all citizens equally via The Public: public infra- structure, laws and enforcement, health, education, scientific research, protection, public lands, transportation, resources, art and culture, trade policies, safety nets, and on and on. Nobody makes it one their own. If you got wealthy, you depended on The Public, and you have a responsibility to contribute significantly to The Public so that others can benefit in the future. Moreover, the wealthy depend on those who work, and who deserve a fair return for their contribution to our national life. Corporations exist to make life better for most people. Their reason for existing is as public as it is private. A disproportionate distribution of wealth robs most citizens of access to the resources controlled by the wealthy., Im- mense wealth is a thief. It takes resources from the rest of the population— the best places to live, the best food, the best educations, the best health facilities, access to the best in nature and culture, the best professionals, and on and on. Re- sources are limited, and great wealth greatly limits access to resources for most people. It appears to me that OWS has a progressive moral vision and view of democracy, and that what it is protesting is the disastrous effects that have come from operating with a conservative moral, economic, and political worldview. I see OWS as primarily a moral movement, seeking economic and political changes to carry out that moral movement — what- ever those particular changes might be. A Moral Focus for Occupy Wall Street I think it is a good thing that the occupation movement is not making specific policy demands. If it did, the move- ment would become about those demands. If the demands were not met, the movement would be seen as having failed. It seems to me that the OWS movement is moral in nature, that occupiers want the country to change its moral focus. It is easy to find useful policies; hundreds have been suggested. It is harder to find a moral focus and stick to it. If the movement is to frame itself, it should be on the basis of its.moral focus, not a particular agenda or list of policy demands. If the moral focus of America changes, new people will be elected and the policies will follow. Without a change of moral focus, the conservative worldview that has brought us to the present disastrous and dangerous moment will continue to pre- vail. We Love America. We're Here to Fix It I see OWS as a patriotic movement, based on a deep and abiding love of country — a patriotism that it is not just about the self- interests of individuals, but about what the country is and is to be. Do Americans care about other citizens, or mainly just about themselves? That's what love of America is about. I therefore think it is important to be positive, to be clear about loving America, seeing it in need of fixing, and not just being willing to fix it, but being willing to take to the streets to fix it. A populist movement starts with the people seeing that they are all in the same boat and being ready to come together to fix the leaks. Publicize the Public Tell the truth about The Public, that nobody makes it purely on their own without The Public, that is, without public infrastructure, the justice system, health, education, scientific research, protections of all sorts, public lands, transportation, resources, art and culture, trade policies, safety nets, ... That is a truth to be told day after day. It is an idea that must take hold in public discourse. It must go beyond what I and others have written about it and beyond what Elizabeth Warren has said in her famous video. The Public is not opposed to The Private. The Public is what makes The Private possible. And it is what makes freedom possible. Wall Street exists only through public support. It has a moral obligation to direct itself to pub- lic needs; All OWS approaches to policy follow from such a moral focus. Here are a handful examples. Democracy should be about the 99% Money directs our politics. In a democracy, that must end. We need publicly supported elections, however that is to be arranged. Strong Wages Make a Strong America Middle -class wages have not gone up significantly in 30 years, and there is conservative pressure to lower them. But when most people get more money, they spend it and spur the economy, making the economy and the country stronger, as well as making their individual lives better. This truth needs to be central to public economic discourse. Global Citizenship America has been a moral beacon to the world. It can function as such only if it sets an example of what a nation should be. Do we have to spend more on the military that all other nations combined? Do we really need hundreds of military bases abroad? Nature We are part of nature. Nature makes us, and all that we love, possible. Yet we are destroying Nature through global warming and other forms of ecological destruction, like fracking and deep -water drilling. At a global scale, nature is systemic: its effects are neither local nor linear. Global warming is causing the ferocity of the monster storms, tornados, floods, blizzards, heat waves, and fires that have devastated huge areas of our country. The hotter the atmosphere, the more evaporated water and the more energy going into storms, tornados, and blizzards. Global warming cannot be shown to cause any particular storm, but when a storm system forms, global warming will ramp up the power of the storm and the amount of water it carries. In winter, evaporated water from the overly heated Pacific will go into the atmosphere, blow northeast over the arctic, and fall as record snows. We depend on nature — on clean air, water, food, and a livable climate. And we find beauty and grandeur in nature, and a sense of awe that makes life worth living. A love of country requires a love of nature. And a fair and thriving economy requires the preservation of nature as we have known it. Summary OWS is a moral and patriotic movement. It sees Democracy as flowing from citizens caring about one another as well as themselves, and acting with both personal and social responsibility. Democratic governance is about The Public, and the liberty that The Public provides for a thriving Private Sphere. From such a democracy flows fairness, which is in- compatible with a hugely disproportionate distribution of wealth. And from the sense of care implicit in such a democracy flows a commitment to the preservation of nature. From what I have seen of most members of OWS, your individual concerns all flow from one moral focus. Elections The Tea Party solidified the power of the conservative worldview via elections. OWS will have no long -term effect unless it too brings its moral focus to the 2012 elections. Insist on supporting candidates that have your overall moral views, no matter what the local issues are. A Warning This movement could be destroyed by negativity, by calls for revenge, by chaos, or by having nothing positive to say. Be positive about all things and state the moral basis of all suggestions. Positive and moral in calling for debt relief. Positive and moral in upholding laws, as they apply to finances. Positive and moral in calling for fairness in acquiring needed revenue. Positive and moral in calling for clean elections. To be effective, your movement must be seen by all of the 99% as positive and moral. To get positive press, you must stress the positive and the moral. Remember: The Tea Party sees itself as stressing only individual responsibility. The Occupation Movement is stressing both individual and social responsibility. I believe, and I think you believe, that most Americans care about their fellow citizens as well as themselves. Let's find out! Shout your moral and patriotic views out loud, regularly. Put them on your signs. Repeat them to the media. Tweet them. And tell everyone you know to do the same. You have to use your own language with your own framing and you have to repeat it over and over for the ideas to sink in. Occupy elections: voter registration drives, town hall meetings, talk radio airtime, party organizations, nomination campaigns, election campaigns, and voting booths. Above all: Frame yourselves before others frame you. George Lakoff is Richard and Rhoda Goldman Distinguished Professor of Cognitive Science and Linguistics at the University of California at Berkeley, where he has taught since 1972. Hepreviously taught at Harvard (1965 -69) and the University of Michigan (1969 - 1972). He graduated from MIT in 1962 (in Mathematics and Literature) and received his PhD in Linguistics from Indiana University in 1966. Reference Resolution Nos. 10718 (CCS) and 10719 (CCS). Additional attachments available for review in the City Clerk's Office.