SR-08-27-2013-3FID
City Council Report
City of
Santa Monica
City Council Meeting: August 27, 2013
Agenda Item: °IF
To: Mayor and City Council
From: Andy Agle, Director of Housing and Economic Development
Subject: Agreement Amendment for Commercial Development Linkage Fee
Recommended Action
Staff recommends that the City Council authorize the City Manager to negotiate and
execute a second modification to Professional Services Agreement #2513 in the
amount of $16,400 with Rosenow Spevacek Group, Inc (RSG), a California -based
company, to complete the scope of work associated with preparing the Commercial
Development / Affordable Housing Linkage Fee. This will result in a one -year amended
agreement with a new total amount not to exceed $76,330.
Executive Summary
RSG has been working on a nexus study for a Commercial Development / Affordable
Housing Linkage Fee. The nexus study identifies the specific types of commercial
development which create employment with salaries that do not adequately provide for
the cost of housing in Santa Monica. Staff recommends extending the agreement with
RSG for an additional year through June 30, 2014 to complete the remaining scope of
work associated with the analysis. The increased contract amount of $16,400 includes
necessary revisions to the fee analysis as well as additional public meetings beyond
what was originally contemplated.
Background
On February 28 2012, Council held a study session to consider a variety of issues
related to housing in Santa Monica. At the study session, Council indicated its support
for preparation of a nexus study to establish a linkage fee for commercial development
that would help ameliorate the impacts of commercial development on the need for
affordable housing.
In mid -2012, staff issued a request for proposals for the development nexus study,
selected a consultant, and began preliminary work. On December 11 2012, the City
1
Council formally directed staff to prepare an ordinance for Council consideration which
would establish an affordable housing linkage fee for commercial development.
Discussion
On June 11, 2013, the City Council introduced the first reading of an ordinance that
would revise existing household income eligibility levels and rent limits for the Affordable
Housing Production Program (AHPP), add an option for developers to provide
affordable housing to households earning no more than 30 percent of the area median
income ( "AMI ") to satisfy AHPP obligations, and make technical changes to reflect
current ordinance administration. The ordinance represented a significant shift in
income and rent limits for the City of Santa Monica and therefore requires that the
consultant, RSG, adjust the figures used in the nexus fee analysis previously submitted
to staff for review. In addition, RSG's presence will be essential at additional public
meetings in preparation for Council consideration.
The original contract executed on July 23, 2012 and first amended on April 12, 2013
provides for a total contract amount of $59,350. Staff now recommends extending the
agreement with RSG through June 30, 2014 and increasing the contract amount by
$16,400 for a total amount not to exceed $76,330 in order to revise the nexus fee study
analysis to reflect AHPP policy changes and to permit RSG to attend public meetings
and address Council or community questions regarding the fee recommendations.
Consultant Selection
On May 9, 2012, staff issued a request for proposals for a nexus study to support the
establishment of a commercial linkage fee to fund the development of affordable
housing. A staff selection committee reviewed the four responses received and
recommended Rosenow Spevacek Group, Inc. (RSG) as the best bidder.
RSG's experience assisting cities with real estate finance, affordable housing,
community development, redevelopment, housing authority activities, and other local
government issues, as well as their experience with preparing commercial housing
nexus studies for other California communities, made their proposal the most
2
competitive. Additionally, when evaluated on an hour for hour basis, RSG's costs were
more competitive than the other three candidates.
Financial Impacts & Budget Actions
The modification to be awarded to Rosenow Spevacek Group, Inc. is $16,400, for an
amended agreement total not to exceed $76,330. Funds are available in the
FY 2013 -14 budget in division 264; the agreement will be charged to account
01264.555060.
Prepared by: Sophie Bennett, Assistant Administrative Analyst
Forwarded to Council:
Andy Agle, Director Rod Gould
Housing and Egop6mic Development City Manager
M
Reference:
Agreement No. 9791
(CCS)