City Council Meeting: May 8, 2007

              Agenda Item: 8-B

To:                   Mayor and City Council 

From:              Andy Agle, Director of Housing and Economic Development

                       

Subject:          Property Exchange of 1920 Ocean Way

 

Recommended Action

Staff recommends that the City Council authorize the solicitation of proposals pursuant to criteria identified in this report for the exchange of the City-owned property located at 1920 Ocean Way for another property to be developed as affordable housing.

 

Executive Summary

Staff recommends the solicitation of proposals to exchange the City-owned property located at 1920 Ocean Way for another property to be developed for affordable housing.  The purpose of the exchange is to obtain a property that could accommodate an increased affordable housing yield relative to what could be achieved on the 1920 Ocean Way site.  It is hoped that the exchanged property will be located in proximity to 1920 Ocean Way so that the needs of workers in the coastal area could be similarly addressed.  Staff will evaluate the responses and return to Council at a later date with a recommendation.

 

 

Background

The City became the owner of the property located at 1920 Ocean Way (see Attachment A) in July 1979.  On June 19, 2001, the Council reaffirmed its commitment to use the property for affordable housing.  

 

On December 11, 2001, the City Council authorized staff to negotiate terms and conditions for the acquisition of property located at 1828 Ocean Avenue (see Attachment B), including a possible trade of the 1920 Ocean Way property.  Sporadic negotiations ensued with the owner but no agreement on the terms was reached.  At the Council meeting of May 25, 2005, staff requested authorization to take the necessary steps to develop affordable housing on the property through a request for proposal process.  At the request of the property owner of 1828 Ocean Avenue, Council continued the requested action to allow for continued negotiations with the property owner and possibly achieve more affordable housing. 

 

Shortly after the arrival of the current City Manager, he met with the owners of the property to determine their level of interest in continuing the discussions that began in 2001.  Based on the meeting, additional meetings were held between both entities regarding a possible trade of the 1920 Ocean Way property with the 1828 Ocean Avenue property.  The owners of 1828 Ocean Avenue have expressed a continued interest in the property exchange.  

 

 

Discussion

The City-owned vacant property located at 1920 Ocean Way is bounded on the north by the Casa del Mar hotel, on the south by Bay Street, on the west by the Promenade Walk, and on the east by Ocean Way.  The site is approximately 23,000 square feet and is zoned R-4.  The zoning would allow approximately 33 affordable units.

 

The Municipal Code requires that any disposition of property be offered competitively.  As other parties may be interested in trading property for the City property, the solicitation of proposals provides an opportunity for any interested party to consider the site and submit a proposal.

 

Staff recommends that the following minimum criteria be identified within the solicitation for any potential property that would be exchanged for 1920 Ocean Way:

-          Property must be currently zoned for residential use;

-          Property must currently provide, at minimum, a 30 percent increase in the affordable housing yield that could be built according to existing zoning standards. Proposed properties that provide the greatest potential increase in affordable housing yield will receive preferential consideration;

-          Property must be located within Santa Monica.  Proposed properties located in proximity to the 1920 Ocean Way site will receive preferential consideration;

-          Property to be exchanged will be restricted for long-term affordability; therefore, no encumbrances on the property prohibiting the restriction will be considered.

The solicitation will ask respondents to identify the property to be exchanged, the proposed use of the City-owned parcel and any special conditions, other than agreement on financial terms of the exchange, that the would be necessary for moving forward.  It is likely that respondents will ask that the final exchange of property be incumbent upon the ability to obtain entitlements for 1920 Ocean Way, as this will affect the financial terms of the exchange.   

 

The solicitation process, from publication to Council recommendation, is estimated to take approximately four months.  Staff will return to City Council with a recommended proposal and plan for moving forward. 

 

Commission Action

On April 19, 2007, staff presented to the Housing Commission an informational report incorporating criteria for a proposed solicitation.  The Housing Commission recommended revisions to the solicitation criteria, which have been incorporated into this report.  With the revisions, the Housing Commission recommended that City Council authorize the solicitation of proposals for the exchange of the City-owned property located at 1920 Ocean Way for another affordable housing development site.

 

Budget/Financial Impact

While there is no budget or financial impact involved in authorizing solicitation of proposals.  The cost to the City, if any, will be identified when a recommendation is presented to Council.

 

Prepared by:

Bob Moncrief, Housing Manager

 

Approved:

 

Forwarded to Council:

 

 

 

 

 

 

Andy Agle, Director

Housing and Economic Development

 

P. Lamont Ewell

City Manager