Item 8-A

 

Council Meeting: August 12, 2003                                      Santa Monica, California

 

 

To:                   Mayor and City Council

                        Chairperson and Redevelopment Agency

 

From:              City Staff 

 

Subject:          Housing Trust Fund Loan and Grant to Ocean Park Community Center for the Acquisition and Rehabilitation of Real Property Located at 1751 Cloverfield Boulevard, and Relocation Agreement between the Big Blue Bus and Ocean Park Community Center

 

 

INTRODUCTION

This report recommends that the City Council and Redevelopment Agency: 1) approve a housing trust fund loan and grant not to exceed $7,397,112 to Ocean Park Community Center, a nonprofit corporation, to acquire and rehabilitate the real property located at 1751 Cloverfield Boulevard as temporary housing for low income persons; and 2) adopt resolutions finding that the Ocean Park Community Center facility is of benefit to Ocean Park Redevelopment Project Areas 1(a) and 1(b).  This report also recommends that the City Council authorize the City Manager to negotiate and execute a relocation agreement between the Big Blue Bus and the Ocean Park Community Center in the amount of $1,800,000.

 

BACKGROUND

Ocean Park Community Center (OPCC) operates the Daybreak Shelter and Access Center programs in a facility located at 612 Colorado Avenue. Daybreak Shelter provides congregate housing for fifteen homeless women, and shelter housing for five homeless women.  The Access Center serves as the entrance to the continuum of care for homeless individuals and families in Santa Monica and assists approximately 200 homeless people daily.  The Access Center provides emergency food, showers, assessments, case management, support groups, shelter placement, and other services that support homeless persons in moving into temporary, and, eventually, permanent housing.

 

The goal of OPCC’s continuum of care philosophy and program is to permanently house homeless persons in private housing, with appropriate income and case management support as needed.  Approximately 93% of persons placed in permanent housing by OPCC over the last five years have remained successfully housed.

 

The Big Blue Bus purchased the 612 Colorado Avenue property in 1985 and has leased space at that location to OPCC since 1986 to operate these two programs. The Big Blue Bus cannot continue to accommodate OPCC’s programs on the property.

 

To select an appropriate site, OPCC staff evaluated twenty-two available sites (Attachment A), in addition to the proposed site (Attachment B), using the following criteria: 1) within the City of Santa Monica; 2) adequate indoor space for programs (at least 10,000 – 15,000 square feet); 3) adequate outdoor area (enclosed or potential to be enclosed) for people to sit or wait, to eliminate lines on the street; 4) adequate parking; 5) minimal impact on residential areas; 6) appropriately zoned for the proposed use; and 6) available for purchase immediately, and occupancy within approximately two years.  The proposed site met all of the above criteria.

 

The property at 1751 Cloverfield Boulevard comprises a 33,700 square foot parcel improved with a two-story, stucco industrial/office building built in 1963 and is located in the City’s Light Manufacturing and Studio District, separated from the closest residential area by approximately 800 feet and Interstate 10.  The building is currently vacant and requires rehabilitation to accommodate the OPCC programs.  The proposed rehabilitation involves interior space redesign, exterior building and landscaping enhancements, and enclosed courtyards.  The rehabilitation of the commercial building requires an Administrative Approval permit and changes in the façade design will require approval of the Architectural Review Board.

 

The Daybreak program will be relocated to the new facility and expanded by ten beds to include a total of twenty congregate housing and ten shelter housing beds for homeless women.  Safe Haven, a new program, will provide an additional twenty-five congregate beds for homeless men and women.  In total, the new facility will include fifty-five congregate and shelter housing beds.

 

OPCC obtained site control of 1751 Cloverfield Boulevard on June 20, 2003, when escrow was finally opened with the property owner.  Commercial real estate negotiations are customarily protracted and sensitive.  In the case of 1751 Cloverfield Boulevard, the City first considered acquiring the property itself.  On November 12, 2002, the City Council approved an agendized staff report in which staff requested authority to “open preliminary discussions with the owners or representatives of the real property located at 1751-1753 Cloverfield Boulevard for its possible acquisition by the City.”  In the staff report, staff noted “the site at 1751-1753 Cloverfield Boulevard has been identified as usable for a variety of potential public purposes including, but not limited to, possible social services programs such as Ocean Park Community Center/Daybreak funded through Community and Cultural Services Department.”  In staff discussions regarding available sources of funds, staff determined that sufficient housing trust funds were available for property acquisition as well as renovation of the proposed property for housing purposes.  Staff further determined that the most efficient process to acquire and renovate the site would be a loan to OPCC pursuant to the Consolidated Housing Trust Fund Guidelines.

 

OPCC submitted a loan application to the City's Housing & Redevelopment Division in January 2003, requesting housing funds to assist in the planning for the acquisition and rehabilitation of the 1751 Cloverfield Boulevard property.  At that point, negotiations between OPCC and the property owner commenced, without agreement until June 20, 2003.  As soon as OPCC and the owner reached agreement and entered into escrow, outreach on OPCC's proposed use of the site commenced.

 

During July and early August 2003, OPCC has informed residents, businesses, neighborhood groups and the media of its role in the community, the programs to be relocated to the proposed site, and efforts being made to ensure that the proposed new facility will be a good neighbor. 

 

OPCC mailed informational materials in English and Spanish to 1,950 neighbors living in an area well exceeding a 500-foot radius of the property, and to community organizations and elected officials.  OPCC conducted door-to-door neighborhood canvassing at approximately 300 adjacent addresses, and in the process spoke to 87 residents, nine businesses, and left information at the remaining 204 addresses.  OPCC staff met with representatives from the Pico Neighborhood Association, Mothers for Justice, Edison Elementary School PTA, Bergamot Station galleries, the Water Garden, the First AME Church of Santa Monica, Saint Anne’s Catholic Church, the Government Affairs Committee of the Santa Monica Chamber of Commerce, and contacted staff from Crossroads and New Roads Schools, Ralph’s supermarket, and Southern California Edison, among other neighboring businesses. 

 

In addition, on July 28, 2003, fifty community members attended an open house held at OPCC’s Turning Point congregate housing facility, located at 1453 16th Street, to inform the public about the proposed facility.  OPCC staff also gave presentations to the Housing and Social Services Commissions, and scheduled a presentation to the Disabilities Commission for August 4, 2003.  At its meeting of July 17, 2003, the Housing Commission supported the use of housing trust funds for a new facility for OPCC.  At the time this report was prepared, the Social Services and Disabilities Commissions had not yet taken action on the development. 

 

Among the issues raised by community members are the proximity of the site to neighboring residential areas, schools and parks; the potential for alternative sites in Santa Monica’s downtown area; safety concerns; and a belief that there is a greater concentration of social services in the Pico neighborhood (see Attachment C for information available at the open house showing the distribution of social services throughout the community).  These concerns will be addressed by monitoring in and around the facility, the inclusion of landscaping, screening and lighting to improve the facility’s privacy and safety, and the prohibition of congregating or camping outside the facility (subject to citation). 

 

DISCUSSION

The City provided OPCC with a housing predevelopment loan of $400,000 to assist OPCC in exploring the feasibility of purchasing the 1751 Cloverfield Boulevard property, preparing preliminary design concepts, and making a deposit on the property upon opening of escrow.  OPCC has completed a feasibility analysis and a preliminary design, and, after extended negotiations, recently opened escrow on the property with a $200,000 deposit.  OPCC now requires the balance of the housing funds requested in its loan application to comply with the terms of the escrow agreement with regard to the acquisition and to assist in the housing component of the planned rehabilitation.  A City funding commitment is required prior to August 18, 2003 to avoid the risk of forfeiting the $200,000 deposit.

 

The total amount of the requested housing loan and grant, including the $400,000 housing predevelopment loan, is $7,397,112 and is available from restricted housing trust funds.  Per the Consolidated Rental Housing Trust Fund guidelines, this loan and grant requires approval of the City Council.   The loan portion of City funding will be funded with TORCA ($1,893,707) and HOME ($800,000) housing trust funds, and the grant portion will be funded from the Redevelopment ($4,703,405) housing trust fund. 

 

The proposed OPCC facility is located outside Ocean Park Redevelopment Project Areas 1(a) and 1(b). The Redevelopment Agency’s $4.7 million funding will be provided as a conditional grant per the Consolidated Rental Housing Trust Funds Guidelines.  The source of Agency funds are proceeds of bonds which were issued to carry out Ocean Park Redevelopment Projects 1(a) and 1(b).  The City Council and the Redevelopment Agency must make the appropriate findings of benefit to authorize the use of these redevelopment funds.  The attached Resolutions (Attachments D and E) determine and find that the activity is of benefit to the Ocean Park Redevelopment Project Areas.

 

Additionally, OPCC has been successful in obtaining a grant for $400,000 from the County of Los Angeles to fund capital development costs related to the housing component of its programs planned for the new facility.  OPCC is applying for an additional $900,000 in state and federal housing funds.  Should OPCC’s applications for state and federal housing funds be approved, the housing loan from the City will be reduced to the minimum subsidy necessary.

 

The Big Blue Bus is obligated to assist displaced tenants and requests approval of a payment of $1.8 million to assist OPCC in its relocation.  If approved, OPCC will use these funds primarily to defray the cost of constructing the non-housing component (that is, social services provided through the Access Center) of the new facility.  In addition to the $1.8 million, OPCC will be required to raise funds to contribute to the cost of the development.  This amount is estimated to be $799,038.  Development costs and funding sources are summarized in the following table:

 

The negotiated purchase price of the property is $5,000,000, which is three percent (3%) higher than the appraised value of the property.  Staff considers the negotiated price of $5,000,000 to be reasonable because the property meets the specific criteria established for a new OPCC facility.  In addition, this development will further two goals of the current Housing Element:  1) Program 2.i  - Facilitate the Development and Maintenance of Special Needs Housing; and 2) Program 2.j - Facilitate the Provision of Emergency, Transitional, and Permanent Housing for the Homeless.

 

The terms of the housing trust fund loan and grant are consistent with the Consolidated Rental Housing Trust Funds Guidelines adopted by the City Council.  The loan and grant terms are 55-years, secured by deeds of trust and are more specifically described below:

 

 

BUDGET/FINANCIAL IMPACT

A loan of $400,000 in housing trust fund money has been previously approved as discussed above.  Sufficient funds are available in the TORCA, HOME, and Redevelopment Housing Trust Funds to fund the $6,997,112 balance of the total loan and grant as follows:

 

 

Additionally, sufficient funds are available in Big Blue Bus account C41010402.589000 to fund the $1,800,000 payment to OPCC.

 

RECOMMENDATIONS

It is recommended that the City Council and Redevelopment Agency:

1.      Approve a housing trust fund loan and grant to Ocean Park Community Center not to exceed $7,397,112 for the acquisition and rehabilitation of the real property located at 1751 Cloverfield Boulevard for temporary housing for low income persons; and

2.      Adopt the attached Resolutions (Attachments D and E) finding that the proposed Ocean Park Community Center facility is of benefit to Ocean Park Redevelopment Project Areas 1(a) and 1(b).

 

It is recommended that the City Council:

1.   Authorize the City Manager to negotiate and execute a relocation agreement between the Big Blue Bus and the Ocean Park Community Center in the amount of $1,800,000.

 

Attachments:

A  -  Locations Considered for OPCC Relocation Plans

B  -  Aerial Photograph of Proposed Site

C  -  City of Santa Monica Funded Social Service Agencies (Map)

D  -  City Council Resolution

E  -  Redevelopment Agency Resolution

 

 

Prepared by:              Jeff Mathieu, Director of Resource Management

                                    Stephanie Negriff, Director of Transit Services, Big Blue Bus

                                    Barbara Stinchfield, Director of Community & Cultural Services

Bob Moncrief, Housing & Redevelopment Manager

Julie Rusk, Human Services Manager

Tina Rodriguez, Redevelopment Administrator

Ron Barefield, Housing Administrator

Jim Kemper, Senior Administrative Analyst

Gigi Decavalles-Hughes, Senior Administrative Analyst