CITY Of LOS ANGELES CRA LA - City Clerk Internet...

CRA LA BUILDING COMMUNITIES

1200 West 7th Street Suite 500 Los Angeles Ca lifornia 90017-2381

of the CITY Of LOS ANGELES

Honorable Council of the City of Los Angeles John Ferraro Council Chamber 200 N. Spring Street Room 340, City Hall Los Angeles, CA. 90012

COUNCIL TRANSMITTAL:

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F2139771665 www.crala.org

CRA File No. ~41J1-Council District: 3

Contact Person: Vicki Gilkey (818) 708-5842

Transmitted herewith, is a Board Memorandum adopted by the Agency Board on September 15, 2011, for City Council review and approval in accordance with the "Community Redevelopment Agency Oversight Ordinance" entit led:

VARIOUS ACTIONS RELATED TO: Public hearing and various actions related to approval and execution of a Disposition, Development and Loan Agreement with Reseda Theater Family Housing , L.P., for the sale of the CRNLA owned properties at 18447 Sherman Way and 7217-7227 Canby Avenue at the fair reuse value of $0 and for financing in an amount not to exceed $1,572,010 for the development of the Reseda Theater Lofts mixed use project, in the Earthquake Disaster Assistance Project for Portions of Council District Three WEST VALLEY REGION (CD 3)

RECOMMENDATION That City Counci l approve(s) recommendation(s) on the attached Board Memorandum.

ENVIRONMENTAL REVIEW The recommended action does not constitute a "project" as defined by the California Environmental Quality Act "CEOA")

FISCAL IMPACT STATEMENT There is no fiscal impact to the City's General Fund, a - ~ result of this action.

I' ( I

I

cc: Sharon Gin, Office of the City Clerk (Original & 3 Copies on 3-hole punch) Lisa Johnson Smith, Office of the CAO lvania Sobalvarro, Office of the CLA Steve Ongele, Office of the Mayor Noreen Vincent, Office of the City Attorney Councilman Dennis P. Zine- 3rd District

bee: Nenita Tan, Office of the City Controller Records (2 copies) Mary Dennis Vicki Gilkey

THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA

DATE:

TO:

MEMORANDUM

SEPTEMBER 15, 2011

CRA/LA BOARD OF COMMISSIONERS

RP1150 100223

FROM: CHRISTINE ESSEL, CHIEF EXECUTIVE OFFICER

STAFF:

SUBJECT:

INVESTMENT

MARGARITA H. DE ESCONTRIAS, REGIONAL ADMINISTRATOR OSCAR IXCO, PROJECT MANAGER VICKI GILKEY, ASSISTANT PROJECT MANAGER ELLEN ADLERMAN-COMIS, SENIOR HOUSING FINANCE OFFICER

Reseda Theater lofts Public Hearing and Disposition. Public hearing and various actions related to approval and execution of a Disposition, Development and Loan Agreement with Reseda Theater Family Housing, L.P., for the sale of the CRA/LA owned properties at 18447 Sherman Way and 7217-7227 Canby Avenue at the fair reuse value of $0 and for financing in an amount not to exceed $1,572,010 for the development of the Reseda Theater Lofts mixed use project, in the Earthquake Disaster Assistance Project for Portions of Council District Three WEST VALLEY REGION (CD 3)

COMMITTEE: Approved on May 25, 2011

RECOMMENDATION(S}

The CRA/LA acknowledges and understands that the Supreme Court in the case entitled California Redevelopment Association v. Matosantos stayed certain portions of Assembly Bill x1-26 and Assembly Bill x1-27. Given the Court's stay and the uncertain status of such legislation, although the CRAILA is, and the City Council may be, approving certain actions as described hei·ein, to the extent that such actions are stayed then the CRA/LA shall not execute agreements or take such actions, notwithstanding their approval hereof, until the Supreme Court has decided the case on the merits or the action is no longer stayed.

That the CRA/LA Board of Commissioners take the following actions:

1. Hold a Public Hearing and request that the City Council hold a public hearing pursuant to California Health & Safety Code Section 33433 regarding the proposed disposition of CRA/LA-owned property located at 18447 Sherman Way and 7217-7227 Canby Avenue, Reseda, CA, for the development of the Reseda Theater Lofts mixed use affordable housing development;

2. Approve the Concept Plans for the Reseda Theater Lofts mixed use affordable housing development;

3. Authorize the Chief Executive Officer or designee to request the City of Los Angeles quitclaim to the CRA/LA the property located at 7221 Canby Avenue, Reseda CA,

Reseda Theater Lofts DOl PAGE2

Assessor Parcel No. 2119-020-901 and deeded to the City by Grant Deed recorded on June 29, 2011 as Instrument No. 2011-0881492 and the property located at 18447 Sherman Way, Reseda CA, Assessor Parcel No. 2125-036-900 through 903 and deeded to the City by Grant Deed recorded on June 14, 2011 as Instrument No. 2011-0808415; and

4. Request that City Council acknowledge and approve the CRA/LA's implementation of the Reseda Theater Lofts Project under the Cooperation Agreement for Payment of Costs Associated with Certain CRAILA Funded Capital Improvements, Public Improvements and Affordable Housing Projects, dated as of March 10, 2011 between the CRAILA and the City of Los Angeles.

That the CRAILA Board of Commissioners, subject to City Council approval:

1. Adopt, and request the City Council to adopt, a Joint Resolution authorizing the CRAILA to sell the properties located at 18447 Sherman Way and 7217-7227 Canby Avenue to Reseda Theater Family Housing, L.P., for the fair reuse value of $0 pursuant to Health and Safety Code Section 33433, and make certain findings pursuant to Health and Safety Code Section 33433 that (i) the sale of the property will provide housing for very low and low income households; (ii) the sale is consistent with the Five-Year Implementation Plan and Redevelopment Plan for the Project Area; and (iii) the consideration to be received by the CRAILA of $0 is not. less than the fair reuse value of the properties, determined at the use and with the · covenants, restrictions and development costs, required by the Disposition, Development and Loan Agreement;

2. Recognize and authorize expenditure of $1,572,010 of FY2012 Reseda/Canoga Park Low and Moderate Income Housing Funds in budget line Affordable Housing (RP1150) for the development of the Reseda Theater Lofts;

3. Authorize the Chief Executive Officer or designee to execute the Disposition, Development and Loan Agreement ("DDLA") with Reseda Theater Family Housing, L.P., to convey the property for $0 in accordance with Health and Safety Code Section 33433, provide a CRAILA Loan for up to $1,572,010 to fund construction costs related~ to the Project and record a covenant agreement restricting the development and use of the property as affordable housing for a period of not less than 55 years, and take such other actions, and execute any such additional agreements, as may be necessary to carry out this transaction; and

4. Auopt a Resolution making the finding that an economically feasible alternative of financing on substantially comparable terms but without subordination of CRA/LA's Deed of Trust and the covenants and use restrictions is not reasonably available, and authorize the subordination of the CRAILA's Deed of Trust and the covenants and use restrictions to all other lenders providing construction funding for this Project.

SUMMARY

The recommended actions will authorize the Chief Executive Officer ("CEO") or designee to request The City of Los Angeles to quitclaim to the CRA/LA the Properties deeded to the City by Grant Deed on June 11, 2011 and to execute a Disposition, Development and Loan Agreement ("DDLA") with Reseda Theater Family Housing, L.P., ("Developer''), in order to convey CRAILA owned property located at 18447 Sherman Way and 7217-7227 Canby Avenue (the "Property") for $0 to develop the Reseda Theater Lofts Project ("RTL Project" or "Project") within the Earthquake Disaster Assistance Project for Portions of Council District Three

Reseda Theater Lofts DOL , PAGE 3

("Reseda/Canoga Park Project Area"). In addition, the recommended actions will provide the Developer a CRA/LA Loan for up to $1,572,010 to fund construction costs related to the Project.

The RTL Project is proposed as a 20 unit mixed use affordable housing development on the former Reseda Theater site. The development will be comprised of one (1), two (2) and three {3) bedroom units of affordable family housing and approximately 730 square feet of retail space built on an approximately 20,000 square foot site. The commercial portion of the development will be located along Sherman Way and the housing units will be built on both the Sherman Way and Canby Avenue parcels. The Scope of Development will include open space and other amenities, and require that the Project be built in conformance with LEED Silver construction guidelines. During construction, the Project is likely to capture significant economies of scale from the construction of the adjacent Canby Woods project which is currently under construction by the same parent development company, Thomas Safran and Associates ('TSA"). When the RTL Project is completed, its residents will be able to utilize their own amenities as well as the services of the Canby Woods community development The total development cost for the RTL Project is estimated at $8,678,953.

PREVIOUS ACTIONS

January 20, 2011 - CRA/LA Board approval to enter into an Exclusive Negotiation Agreement with Thomas Safran & Associates

March 18, 2010- Report to the CRNLA Board on Intent to Issue Request For Proposal of Reseda Theater Site

January 21, 2010 - Report to the Board of Termination of Disposition and Development Agreement between CRA/LA and CIM Group for the Reseda Theater Site

June 23, 2006 - City, Council authorization to acquire Canby Avenue Property (Council File # 04-1111-S 1 )

June 18, 2005 - City pouncil authorization to enter into a Disposition and Development Agreement with CIM Group (Council File #04-111 i)

DISCUSSION & BACKGROUND

In 2005 the CRA/LA issued an initial Request for Proposals ("RFP") for the Reseda Theater project. Through a comprehensive competitive process, including site tours and pre-proposal meetings to discuss the RFP, CIM Group was selected from a group of four (4) presenting development teams. In 2006, both an Exclusive Negotiaton Agreement ("ENA") and a Disposition and Development Agreement ("2006 DDA'') were executed with CIM Group for the proposed adaptive reuse of the Reseda Theater Site as a live entertainment venue, with the rear parcel to be used for surface parking. On December 5, 2009, the 2006 DDA was terminated as a result of CIM Group's inability to secure the financing necessary to realize the project, lengthy delays and a waning of community and political support.

The CRA/LA conducted a subsequent RFP in June 2010. Significant outreach was conducted both locally and nationally to ensure the broadest reach possible. The RFP notice went out in multiple languages and was advertised in various newspapers including the Los Angeles Times, La Opinion, San Fernando Valley Business Journal, Los Angeles Sentinel, Orange County Business Journal, West Valley News as well as newspapers serving Korean, Chinese, and Vietnamese communities. The RFP notice was also advertised to the local community,

Reseda Theater Lofts Du- , PAGE4

business and development communities, artist communities, schools, universities, Chambers of Commerce, and non-profits, including the California Redevelopment Association, Valley Industry & Commerce Association, NoHo Arts Network, the Minority Business Opportunity Center, American Planning Association and the International Council of Shopping Centers. The competitive process also included two (2) pre-proposal meetings and two (2) site tours.

The CRA/LA received six (6) proposals from Abode Communities, Combined Properties, Denly Investment & Management, Los Angeles Housing Partnership, Meta Housing Corporation and Thomas Safran & Associates for various types of mixed use and commercial development. The first panel was comprised of CRAILA West Valley Region staff including the Regional Administrator, Project Manager, Senior Real Estate Development Agent, and Associate Planner and through their review and scoring, four of the six development proposals were selected as finalists. The finalists included Abode Communities, Combined Properties, Meta Housing Corporation and Thomas Safran & Associates. Presentations from the finalists were heard by a second panel, which included CRA/LA West Valley Region staff, CRA/LA Housing Manager and City Planner from the Los Angeles Department of City Planning. Each presentation was reviewed and scored by the panel based on the following criteria: (a) vision for the project; (b) project financing; (c) community and political support (d) project scheduling; (e) community benefits. As a result of the final scoring, Thomas Safran & Associates ("TSA") was selected as the final development team and on January 20, 2011, the CRAILA Board of Commissioners approved execution of an ENA with TSA that resulted in the actions at hand.

Location

The proposed Project will be developed on two separate, non-contiguous parcels in the San Fernando Valley community of Reseda. The first parcel is located at 18447 Sherman Way, just east of Reseda Boulevard. This parcel is approximately 9,000 square feet in area. It is currently occupied by an aging movie theater, the Reseda Theater, which has been vacant and boarded up since 1988. The second parcel is located behind the Reseda Theater on the other side of an alley. That parcel is located at 7219-7227 North Canby Avenue. The Canby parcel is approximately 10,995 square feet in area. The Canby property has been vacant since CRAILA demolished an aging retail structure in August 2008. The combined project site is 19,995 square feet of n~t land area. (Attachment "A"- Location/Site Map)

On March 17, 2011, and March 22, 2011, the CRA/LA Board and City Council respectively approved conveyance of CRA/LA real property to the City of Los Angeles to further implementation of the Cooperation Agreement between the CRA/LA and City of Los Angeles dated March 1 0, 2011. As a result, on June 11, 2011, the CRAILA deeded to the City of Los Angeles both parcels that make up the Project Site. Through approval of the above actions, the CRA/LA will request the City to quitclaim the property to the CRA/LA to implement the Project.

Developer Entity

TSA, a Sole Proprietorship, has over 35 years experience in developing affordable housing in Southern California. TSA has established a reputation for creating very high quality developments and responsibly maintaining them to provide a strong quality of life for their residents. As a result, Mr. Safran and his team are highly regarded in the affordable housing industry in Southern California. TSA has recently completed its second mixed-use housing retail project apart from a long list of standard affordable housing developments.

TSA owns and manages more than 3,300 rental units of affordable housing, many of which have won awards from prestigious organizations. TSA's Canby Woods Senior Housing Development in Reseda is currently under construction and is adjacent to the Canby Avenue section of the RTL Project. The ultimate borrower for the CRA/LA Loan will be Reseda Theater

Reseda Theater Lofts DDL .. PAGE 5

Family Housing, L.P., which is a single-asset entity whose sole purpose is the development and operation of the RTL Project. TSA will form a California limited liability company to act as a cogeneral partner for the Project. It is expected that TSA will be the sole member of the new LLC.

The managing general partner will be Housing Corporation of America (HCA), a nonprofit corporation formed in Utah (although it has a California exemption). Since its incorporation in 1990, HCA has participated in the development and ownership of 55 affordable housing complexes encompassing 5,341 units. Ninety-five percent of HCA's units are in California.

Description and Project Context

The RTL Project will be a "by right" development consistent with existing zoning. The Project will incorporate Art Deco design elements, including a Reseda sign, as a tribute to the original theater. The Project will utilize economies of scale with construction costs and project scheduling shared with Canby Woods, the adjacent TSA development project. Canby Woods is a 98-unit senior affordable housing project approved by the CRA/LA Board and City Council which began construction in August 2011. The RTL Project will be comprised of 20 rental housing units for very low and low income families and individuals. The construction of the proposed development will consist of two wood frame buildings over one level of parking. It is anticipated that the building replacing the Reseda Theater will be two stories with ground floor retail facing Sherman Way, parking in the rear and housing units above. The Canby Avenue lot will contain three stories of housing above surface parking. The buildings will be designed to provide access to both parking facilities from an alley between the Reseda Theater and Canby lot. Parking includes 28 residential spaces and three spaces for retail.

The residential component of the development will be approximately 18,880 square feet including eight {8) one-bedroom units each approximately 785 square feet, six (6) two-bedroom units each approximately 850 square feet, and six (6) three-bedroom units each approximately 1 ,250 square feet. The development also includes a laundry room, recreational flex space, and common patio areas. The flexible space may be used by the tenants to create a live/work environment or leasedc to tenants strategically selected in partnership with the CRA/LA. The commercial component of the development will be approximately 730 square feet of neighborhood serving retail along Sherman Way. The combination of the RTL Project and the Canby Woods Senior Housing community will create a sustainable intergenerational community with housing options, shared amenities and services and added diversity for the Reseda neighborhood. Both buildings will be managed by staff from Canby Woods. The proposed timeline for the project development is 24 months after an executed DDLA with the CRA/LA is confirmed.

Project History

The Reseda Theater was built in 1948 and was locally well known by many people who still live, work and conduct business in Reseda and who remember it as a vibrant venue for moviegoers. However, the Reseda Theater building has been vacant for 22 years. CRA/LA acquired the Reseda Theater parcel in 2004 and subsequently acquired the parcel on Canby Avenue in 2005.

Community Benefits

The public benefits of the proposed RTL Project include removal of the blighted theater structure, which will provide a significant boost to the visual appeal of this section of Sherman Way. The RTL Project will provide affordable housing, improve the value of the surrounding land and buildings, create jobs and be catalytic in sparking interest in further revitalization opportunities. Additionally, as the economy recovers, the Project will likely attract two new retail

Reseda Theater Lofts DOL. , PAGE6

businesses to the site and the neighborhood, resulting in the businesses bringing long-term jobs to the area as well as generating additional sales tax revenue.

The revitalization of these parcels is aimed at promoting the creation of jobs and developing a pedestrian-friendly community with a mix of well-designed affordable housing and neighborhood-serving businesses that will activate street fronts and stimulate new uses in close proximity to transit and other Reseda businesses lining Sherman Way.

Variances from CRAJLA Policies and/or Guidelines

None

Findin.9§

As required by section 33433 of the Health and Safety Code, the City Council is required to make findings that the conveyance of the Property: (i) will provide housing for low income persons; (ii) is consistent with the Five Year Implementation Plan for the Reseda/Canoga Park Project Area; and {iii) that the consideration to be received by CRAJLA is not less than the fair reuse value of the Property, determined at the use and with the covenants, restrictions and development costs required by the DDLA. A report analyzing the economics of the DDLA, as required by Section 33433, is included in Attachment "E" - 33433 Resolution and Summary. Report. A Notice of Public Hearing was published in the Los Angeles Daily News beginning 14 days prior to the anticipated date of the hearing. The dates of publication were September 1 and 8, 2011. ·

The Project will be subject to recorded income and use restrictions for a period of not less than 55 years. The State Redevelopment Law authorizes subordination of income and use restrictions to other governmental lenders or to conventional lenders if the CRA/LA makes a finding that an economically feasible alternative method of financing or refinancing without subordination is not reasonable available and when the CRA!LA obtains written commitments reasonable designed to protect the CRA/LA's investment in the event of default.

Currently, CRAJLA staff; is not aware of any domestic lending institutions willing to provide conventional financing without subordination of covenants, as well as CRA/LA loans. Such well-margined low-risk loans are still eligible for credit under the Community Reinvestment Act. The conventional construction and permanent lender as indicated that subordination of the CRA/LA's covenants will be required. Staff recommends that the CRA/LA Board of Commissioners make the finding that an economically feasible alternative method of financing or refinancing without subordination is not reasonably available, but only when the CRA/LA obtains written commitments reasonably designed to protect the CRA/LA's investment in the event of default. (Attachment "D"- Subordination Resolution)

The Subordination Agreement will contain provisions such as one or more of the following rights as set forth in the statute:

A A right of the CRA/LA to cure a default on the loan.

B. A right of the CRA/LA to negotiate with the lender after notice of default from the lender.

C. An agreement that if prior to foreclosure of a loan, the CRAJLA takes title to the property and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of transfer of title to the CRA!LA.

Reseda Theater lofts DDL. , PAGE 7

D. Right of the CRA/LA to purchase property from the owner at any time after a default on the loan.

Financial Analysis

The total development cost for the RTL Project is estimated to be $8,678,953 ($433,948 per unit). CRA/LA's investment in the Project includes (1) conveyance of CRAILA owned property at a fair reuse value of $0 but recently appraised at $1.2 million and (2) a $1,572,010 construction loan with a 55 year term to begin subsequent to the issuance of a Notice of Completion. The CRA/LA's contribution to the Project translates to approximatley $138,601 per unit (CRA/LA's land value and construction loan combined) or $78,600 per unit (CRA/LA's construction loan only). Interest will bear on the CRA/LA Loan at 3% simple interest accruing from the date of the promissory note, payable based on the CRA/LA's pro rata share of residual receipts. (Attachment "B" - Project Term Sheet) The CRA/LA's deed of trust and the recorded use restrictions wilt be subordinate to the deeds of trust and regulatory agreements of the construction lenders for this Project.

The Developer is pursuing additional Project financing sources consisting of construction and permanent bank loans, Los Angeles Housing Department funds and the syndication of Low Income Housing Tax Credits. (Attachment "0"- Sources and Uses)

The total development costs for the RTL Project is $8,678,953 or $433,948 per unit. These figures include 28 parking spacing for residents and seven (7) for retail customers, public open space, LEED Silver certification, and other amenities. ·

HOUSING INCLUSIONARY AND PROPORTIONALITY REQUIREMENTS

As indicated in Attachment "C", Affordable Housing Information, with the approval of this proposal, the Reseda/Canoga Park Project Area will not have provided sufficient affordable housing units to comply with the 15% lnclusionary Housing requirement, but staff expects to come into compliance on or before the December 31, 2014 statutory compliance deadline as a result of the RTL Project, which will contribute four ( 4) Very Low Income units and no additional Moderate Income units t~rough its affordable component, as well as other proposed affordable projects that are currently under consideration.

As indicated in Attachment "C" Affordable Housing Information, with the approval of this proposal, the Reseda/Canoga Park Project Area will not have spent funds from the Low and Moderate Income Housing Fund ("LMIHF") in proportion to need, in that the amount of LMIHF spent to date on Low and Moderate units will currently exceed the allowable percentage. However, the RTL project contributes favorably to proportionality requirements by reducing the percentage of Moderate Income expenditures. Staff expects to come into compliance on or before the December 31, 2014 statutory compliance deadline as a result of funding the development of one or more proposed non-age restricted affordable housing projects that are currently under consideration. Additionally, the percentage of non-age restricted housing expenditures improves with the funding of this Project.

ECONOMIC IMPACT

A major CRA/LA objective in Council District Three is the economic recovery of Reseda's downtown commercial district. It is estimated that the Project will create approximately 150 construction jobs and four permanent jobs and improve the physical conditions of the commercial district This will help retain and attract new businesses as part of a larger revitalization strategy including commercial fayade improvements, median beautification, alley

Reseda Theater Lofts DD'-'"" PAGE 8

reconstruction, development of new affordable housing and development of a Reseda Town Center on CRA/LA-owned property on Sherman Way.

The RTL Project is consistent with the current and future "Projects and Programs" for Affordable Housing Development identified under the Reseda-Canoga Park Project Area's Five Year Implementation Plan. The improvements also support the CRA/LA Strategic Plan Goals 1.1.1, 1.1.2 and 2.1.1

Estimated Construction Jobs Created 150

Estimated Permanent Jobs Created 4

The figures provided in the table about are for estimation purposes only; actual fiscal impact or job creation may be higher or lower than these estimates. Standardized formulas were used to generate these figures and are based on accepted econometric practices and basic tax calculations taken from research performed by a variety of sources, including the Los Angeles Economic Roundtable, California Redevelopment Association, US Department of Housing and Urban Development, CRA/LA, and the City and County of Los Angeles.

SOURCE OF FUNDS

Reseda/Canoga Park Low and Moderate Income Housing Fund

PROGRAM AND BUDGET IMPACT

The recommended action will transfer $1,572,010 of Reseda/Canoga Park Low and Moderate Income Housing Fund into the Proposed FY2012 Budget and Work Program pending Council action, relating to the Reseda/Canoga Park Project Area. The new resources identified are available within the Reseda/Canoga Park budget line Affordable Housing (RP1150). Following the recommended transfer, sufficient funds remain in the Reseda/Canoga Park Project area budget to pay for their required Voluntary Alternative Redevelopment Program (VARP) transfer to the City for remittance to the County Auditor-Controller.

There is no impact on the City's General Fund as a result of this action.

ENVIRONMENTAL REVIEW

The proposed project is exempt from the California Environmental Quality Act (CEQA) pursuant to Section 15194 (Affordable Housing Exemption) of the State and CRA/LA CEQA Guidelines.

AUTHORITY GRANTED TO CEO OR DESIGNEE

If the DDLA is approved, the CRA/LA Chief Executive Officer or designee would be authorized to take such actions as may be necessary to carry out the Agreement, including, but not limited to, executing the CRA/LA disposition documents, the CRA/LA Loan documents and taking the following actions: (1) extending the Initial Term of the Loan by up to one additional year for a total not to exceed three years; (2) approving revisions to the Project Budget, so long as the changes do not increase the amount of the CRA/LA Loan or otherwise have a material adverse impact on the feasibility of the project; (3) negotiating and executing subordination agreements meeting the requirements of California Health and Safety Code Section 33334.14, and making reasonable modifications to the CRA/LA Loan Documents that may be requested by any Senior Lender or Tax Credit Equity Investor, so tong as such changes do not adversely affect the receipt of any material benefit by CRA/LA; {4) negotiating and executing Inter-creditor Agreements with and Estoppel Certificates to other lenders, to the extent such lnter~creditor

Reseda Theater Lofts DDL.-. PAGE 9

Agreements and Estoppel Certificates are consistent with the terms of the DDLA; and (5) approving certain non-material revisions to the terms of the DDLA reasonably requested by a Permitted Lender or Tax Credit Equity Investor.

PROJECT SUPPORT

Councilman Dennis P. Zine and the Reseda community-at-large have demonstrated support for the realization of this long-awaited project.

Christine Essel Chief Executive Officer

B~-Dallla Sotelo Deputy Chief Executive Officer

There is no conflict of interest known to me which exists with regard to any CRA/LA officer or employee concerning this action.

ATTACHMENTS

Attachment A. Attachment B. Attachment C. Attachment D. Attachment E. Attachment F. Attachment G. Attachment H.

Location/Site Map Project Term Sheet Affordable Housing Information Sources and Uses 33433 Resolution and Summary Report Subordination Resolution Concept Plans Project Summary Report

Attachrrent A

Project Site Map

Aerial photo of the opportunity site parcels. Building on parcel labeled "Vacant Lot" has been demolished since aerial photograph was taken.

vncFUL .... Lien Priority? Subordination of Housing Covenant?

Other Project Funding Sources:

Any special provisions/conditions precedent or subsequent? Examples: Allocation by TCAC within how many rounds; commitment from other funding sources (may include commitment of equity factor); timing of CRAILA funding; non-disturbance agreement if it is a leasehold deal; any unique,

issue? Consistent with CRA!Li\ Housing Policy?

ATTACHMENT 8 PROJECT TERM SHEET

[3J TCAC ~9% 0 CDLAC-4%

33334.14 fin

0 CDLAC/Bond Only (no tax credits) [3J LAHD 0 MHSA 0 HCD: TOO __ ; INFILL~_; MHP_; GHI_ 0 City of Industry D AHP [3J Other: Conventional

[3J Yes 0 No (if No, brief justification for deviation): __

Project Term Sheet- Affordable Housing

ATIACHMENT C

AFFORDABLE HOUSING INFORMATION SHEET

Project Name: -~R::e::s:::eo;d~a:7Th=e-"a:::te::..re;l~oft:.::s"-::=::-c::-:--Project Address: 18447 Sherman Way; 7217 Canby Avec Reseda, CA 91335

Project Developer: Thomas Safran & Associates

CRAILA Region: West Valley Region Project Area: Reseda/Canoga Park

Date of Proforma: 311612011

;~o~~CES·.· .. .. .. ??-''' ... '

Conventional Constr/Perm Loan CRNLAland CRNLALoan LAHD Loan FHLB AHP Funds Tax Credit Equity Deferred Developer Fee

Total

A'Ct!lf(SfTii:iff)(· .DETiS.[L .. T

CRNLA Land $1,200,000 $0

Total $1,2qD,OOO

··· ··.·• · · · Ti;ital 2,772,010

ATTACHMENT D

SOURCES & USES

~, ' " .. ~ ? y ? '

? ,,,

Construction

3,621,600 1,200,000 1,572,010 1,000,000

645,343 640,000

$8,678,953

.. . .• . •

Percentage

100.00% 0%

100.0%

. . ...

5.28 111.58

17.85 0.55 8.17

..

Permanent

604,657 1,200,000 1,572,010 1,000,000

4,302,282 4

$6,678,953 $0

Amount

1,200,000 .

1,200,000

. . .. ·' . . " '.\ rc ""

" " - ~

' ,,·"" · .. .""?" ??A"? .. . ..

Per

Per Unit Restricted Unit

30,233 30,233 60,000 60,000 78,601 78,601 50,000 50,000

215,114 215,114

0 0

---

$_~3,948 $433,946

.. .. ' .. .. . .. . Percentage Amount

0.0% $0 100% $0 0.0% $0

ATTACHMENT E

THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF lOS ANGELES, CA

THE LOS ANGELES CITY COUNCil

RESOLUTION NO. ____ _

A JOINT RESOLUTION OF THE CITY COUNCIL OF THE CITY OF LOS ANGELES AND THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA AUTHORIZING THE SALE OF CRAJLA OWNED PROPERTY LOCATED AT 18447 SHERMAN WAY AND 7217-7227 CANBY AVENUE IN THE EARTHQUAKE DISASTER ASSiSTANCE PROJECT FOR PORTIONS OF COUNCIL DISTIRCT THREE THROUGH A DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT FOR THE CONSTRUCTION OF A 20-UNIT AFFORDABLE HOUSING PROJECT BY THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, AND MAKING CERTAIN FINDINGS PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 REGARDING THE TRANSFER OF PROPERTY AND DEVELOPMENT OF THE RESEDA THEATER LOFTS PROJECT FOR USE AS AFORDABLE HOUSING fOR VERY lOW TO LOW INCOME HOUSEHOLDS.

WHEREAS, the City Council (the "City Council") of the City of Los Angeles (the "City") has adopted a redevelopment plan, as amended from time to time (the "Redevelopment Plan"), for redevelopment of the Earthquake Disaster Assistance Project for Portions of Council District Three (the "Project Area"); and

WHER~AS, the Community Redevelopment Agency of the City of Los Angeles ("CRA/LA") is responsible for administering the Redevelopment Plan to cause redevelqpment of the Project Area; and

WHEREAS, CRAJLA intends to convey an approximately a half-acre of property located at 18447 Sherman Way and 7217-7227 Canby Avenue in Reseda (the "Site"); and

WHEREAS, CRA/LA desires to cause redevelopment of the Site through construction Jf an approximately 20,611 square foot development as mixed use affordable housing (the "Project"); and

WHEREAS, CRA/LA desires to enter into a Disposition, Development and Loan Agreement ("DDLA") with Reseda Theater Family Housing, LP (the "Developer"), substantially in the form on file with the City Clerk and CRAJLA, under which the CRAJLA would sell the Site to the Developer and upon such conveyance the Developer would develop the Project on the Site in accordance with the DDLA; and

WHEREAS, the Project will benefit the Project Area and serve major Redevelopment Plan goals and objectives by alleviating blight in the Project Area by replacing the underutilized vacant property with 20 affordable units for households of very low and lowqualifying incomes and by creating stability in the Project Area; and

WHEREAS, the CRAJLA has placed on file in the CRAJLA Records Center on the 2nd Floor of the CRA/LA Offices, located at 1200 W. ih Street, Los Angeles, CA 90017, a copy

1

of the DDLA and the summary called for in Health and Safety Code Section 33433 (the "Section 33433 Summary"), and has made the DDLA and the Section 33433 Summary available for public inspection and copying pursuant to Health and Safety Code Section 33433. The Section 33433 Summary is incorporated in this Resolution by this reference; and

WHEREAS, the CRAILA and the City Council have conducted a duly noticed public hearing on the DDA pursuant to Health and Safety Code Section 33433 for the purpose of receiving the input and comments of the public on the DDLA; and

WHEREAS, by staff report accompanying this Resolution and incorporated into this Resolution by this reference (the "Staff Report"), CRA/LA and the los Angeles City Council have been provided wHh additional information upon which the findings and actions set forth in this Resolution are based.

1. The City Council and CRA/LA find that the above Recitals are accurate.

2. Pursuant to Health and Safety Code Section 33433, the City Council and CRAILA hereby find that the consideration to be paid by the Developer under the DDLA is not less than the fair reuse value of the Site, determined with the covenants and conditions imposed by and development costs authorized by the DDLA. This finding is based on the facts and . analysis set forth in the Staff Report and the Section 33433 Summary Report accompanying this Resolution.

3. Pursuant to Health and Safety Code Section 33433, the City Council and CRA/LA hereby find that the conveyance of the Site pursuant to the DDLA will assist in alleviating blight in the Project Area, will assist the provision of housing for very low to low qualifying income individuals in the Project Area and is consistent with the Implementation Plan adopted pursuant to Health and Safety Code Section 33490. These findings are based on the facts and analysis set forth in the Section 33433 Summary and the Staff Report accompanying this Resolution.

2

I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting of The Community Redevelopment Agency of the City of Los Angeles held on September 15, 2011, by ________ who moved its adoption and passage by the following vote:

SECONDED:

AYES:

NOES:

ABSENT:

APPROVED

ATTEST:

I HEREBY CERTIFY that the foregoing Resolution was introduced at a regular meeting of the Los Angeles City Council held 2011, by who moved its adoption and passage by the following vote:

SECONDED:

AYES:

NOES:

ABSENT:

APPROVED

ATTEST:

3

LESAR ·l)l V EL<)J'\tl E "! T CONSULTANTS

SUMMARY REPORT PURSUANT TO SECTION 33433

OF THE CALIFORNIA HEALTH AND SAFETY CODE FOR THE

DISPOSITION, DEVELOPMENT AND LOAN AGREEMENT BY AND BETWEEN

2410 First Avenue

San Diego, CA 9210 I

619·236·0612 619·236-06!3 FAX

www.LeSarOevclopment.com

THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES AND

RESEDA THEATER FAMILY HOUSING, LP.

California Redevelopment Law (California Health and Safety Code Section 33000 et.seq.) requires redevelopment agencies that wish to sell or lease real property to obtain the prior approval of tt)e local legislative body after a public hearing. A copy of the proposed sale or lease agreement, along with a summary report outlining the salient points of the transaction, must be available for public inspection prior to the public hearing. The following information must be included in the summary report:

1. The cost of the agreement to the redevelopment agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency, plus the expected interest on any loans or bonds to finance the agreements; .

2. The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the redevelopment plan;

'

3. The estimated value of the interest to be conveyed in accordance with the uses, covenants, and development costs required under the proposed agreement with the agency;

4. If the sale price is less than the fair market value of the interest to be conveyed (determined at the highest and best use consistent with the redevelopment plan), the summary report must include an explanation of the reasons for the difference; and

5. An explanation of why the sale or lease of the property will assist in the elimination of blight

To satisfy these requirements, this report outlines the salient points of the Disposition, Development and Loan Agreement by and between the Community Redevelopment Agency of the City of Los Angeles ("CRA/LA") and Reseda Theater Family Housing, L.P. ("Developer'') for the development of 20 units affordable rental housing and approximately 730 square feet of retail space in Reseda (the "Agreement").

This report is based on information in the proposed Agreement and is organized into the following five sections:

33433 Summary Report Reseda Theater Lofts

Page 2 of 8

1. Summary of the Proposed Agreement: This section describes the property to be conveyed, the proposed project, and outlines the major responsibilities of CRA/LA and the Developer.

2. Estimated Highest and Best Use Value of the Property to be Conveyed: This section shows the fair market value of the property to be conveyed to the Developer, in its highest and best use, consistent with the redevelopment plan.

3. Estimated Value of the Property to be Conveyed as Governed by the Agreement: This section shows the value of the property as governed by the subject Agreement.

4. Cost of the Agreement to the Agency: This section summarizes all of the costs incurred by CRAILA in the proposed transaction.

5. Elimination of Blight & Conformance with Five-Year Implementation Plan: This section explains how the sale of the site will assist in the elimination of blight and how the transaction conforms to the CRA/LA Five-Year Implementation Plan.

1. SUMMARY OF THE PROPOSED DISPOSITION, DEVELOPMENT, AND LOAN AGREEMENT

A. Description of the Site and the Project

1. Project Sites

The proposed Project will be developed on two separate, non-contiguous parcels in the San Fernando Valley community of Reseda. The first parcel is located at 18447 Sherman Way, just east of Reseda Boulevard. This parcel is approximately 9,000 square feet in area. It is currently occupied by an aging movie theater, the Reseda Theater, which has been vacant and boarded up since 1988.

The second parcel is located behind the Reseda Theater on the other side of an alley. That parcel is located at 7219-7227 North Canby Avenue. The Canby parcel is approximately 10,995 square feet in area. The Canby property has been vacant since CRAJLA demolished an aging retail structure in August 2008.

CRAILA currently owns both parcels that make up the project site. The combined project site is 19,995 square feet of net land area. (The Sherman Way and the Canby sites are referred to collectively in this report as the "Project Site.")

2. Developer

The Developer of the project will be Reseda Theater Family Housing, l.P., a California limited partnership. The general partners of the Developer are Thomas Safran & Associates, a sole proprietorship, and Housing Corporation of America, a California nonprofit corporation.

3. Proposed Project

33433 Summary Report Reseda Theater lofts

Page 3 of 8

The proposed development will be known as Reseda Theater Lofts (the "Project"). On the Sherman Way site, the ground floor of the new development will consist of approximately 730 square feet of retail space in two storefronts facing the boulevard, with parking behind. Above the retail space and the parking, there will be 2 stories of rental units, although the third story will be stepped back so that it is less visible from Sherman Way. A total of six apartments will be located on the Sherman Way site ..

The Canby site will be developed with 14 rental housing units in 3 stories over a ground floor parking garage.

All together the new development will provide 20 affordable apartment units and 28 parking spaces. The 20 apartments will be comprised of 5 one-bedroom units, 7 two-bedroom units, and 8 three-bedroom units. Under the terms of the Agreement, all of the units will be restricted with rents based on household incomes not exceeding 60% of Area Median Income (AMI). If the project is successful in securing an allocation of Low Income Housing Tax Credits, which is essential to the current financing plan, additional restrictions will be imposed by the California Tax Credit Allocation Committee. Under those restrictions, the new development must provide housing affordable to a variety of very low- and low-income households as follows:

Afford ability Number of Average Level Units Unit Size

-~~~

1-Bedroom 50% AMI 2 600

1-Bedroom 60%AMI 3 600

2-Bedroom 30% AMI i 1030

2-Bedroom, 40%AMI 1 1030



3-Bedroom 30%AM! 1 1200




Averages/Totals 51% AMI 20 991

Parking Spaces 28

B. CRAJLA Responsibilities

Under the terms of the Agreement, the following are the key responsibilities of CRA/LA

1. After all of the conditions to conveyance have been satisfied, CRA/lA will convey the Project Site "as is, with all faults" to the Developer for the fair reuse value of the site, which is estimated to be $0. (Please see Section 3 of this report.)


Page 4 of 8

2. CRNLA will provide an additional loan to the Developer in the amount of $1,572,010 to cover a portion of construction and permanent costs. The term of the loan will be 55 years. The principal amount of the loan will bear simple interest at a rate of 3.0 percent per year. Repayments of the loan will be due and payable only to the extent that residual receipts are available from operations of the Project.

C. Developer Responsibilities

Under the terms of the Agreement, the following are the key responsibilities of Developer:

1. Developer must design and construct the Project according to CRNLA Multifamily Housing Design Guidelines, CRA/LA-approved project documents, all applicable zoning, land use, and building permit requirements.

2. The Project must be completed in accordance with a Schedule of Performance as shown in the Agreement

3. Developer must build the Project in a sustainable manner and in conformance with LEED Silver construction guidelines.

4. Developer must conduct affirmative outreach in its contracting procedures and conform to all CRA/LA and City of Los Angeles requirements for local hiring and living wage rates.

5. DevelopE!r ,must rent four (4) units to very low-income households (as that term is defined by California Health and Safety Code) and sixteen (16) units to low-income households (as that term is defined by California Health and Safety Code), each at Affordable Rents as defined in the Agreement.

6. Developer must make annual debt service payments to CRA/LA to the extent that residual receipts are available from project cash flow.

2. ESTiMATED HIGHEST AND BEST USE VALUE OF THE PROPERTY TO BE CONVEYED

According Moody's Commercial Property Price Index, the market value of commercial properties across the United States virtually doubled between January 2001 and March 2008. After that, commercial property values declined precipitously and they are now just above where they were in 2001. CRA/LA acquired the Sherman Way site in 2005 for the then-appraised value of $1,326,757. CRA/LA acquired the Canby site in 2006 for the thenappraised value of $1 ,277, 124. So, the combined purchase price for the Project Site was $2,603,881. The properties were purchased near the top of the value trend curve for the broader real estate market. Since that time, a global economic recession has had a significant negative impact on the value of real estate in Southern California.

An appraisal completed on behalf of CRA/LA on March 9, 2011, by Hampstead Appraisal Company, concluded that, given current market conditions, the highest and best use of the Project Site would be "to hold the site until market conditions improve and warrant future


Page 5 of 8

commercial development." Based on comparable land sales, the appraiser concluded that the "as is" value of the Project Site at its highest and best use is $1,200,000.

LeSar Development Consultants has thoroughly reviewed the Hampstead Appraisal and concurs with its conclusions, based on comparable sales, that the highest and best use value of the Project Site is $1,200,000.

3. ESTIMATED VALUE OF THE PROPERTY TO BE CONVEYED AS GOVERNED BY THE AGREEMENT

The reuse value of the Project Site is a direct function of the development economics of the specific project required in the Disposition, Development, and Loan Agreement. That Agreement imposes deed restrictions that require the Developer to hold all 20 of the units in the project affordable to families earning between 30 and 60 percent of area median income (AMI). First year rents will range from $495 to $794 per month. These affordability restrictions will remain in place for not less than 55 years.

Given these strict limits on the rents that can be charged, the Project only generates sufficient 'net operating income to support a conventional first mortgage of $604,657. The capitalized value of the net revenue stream is estimated at just over $1.0 million .. This contrasts wHh the estimated total development costs of the Project (net of land) of $7,478,954. Because the value of the completed Project with affordability restrictions in place is less than the total cost to build the Project, the residual value of the Project Site--the "fair re-use value"--is zero.

Indeed, without sign(ficant public subsidies, the project could not be developed. In order to make the project viable, the Developer will obtain an allocation of Low Income Housing Tax Credits and will secure an additional subsidy loan from the Los Angeles Housing Department (LAHD). CRAJLA will provide additional gap financing to render the Project financially feasible. The total permanent sources of funds anticipated for the Project as are follows:

PERMANENT SOURCES OF FUNDS

Conventional Mortgage $604,657

LAHD Affordable Housing Trust Fund 1,000,000

Tax Credit Equity 4,302,287

LA Community Redevelopment Agency 1 ,572,01_Q_

TOTAL $7,478,954

Under the terms of the Agreement, CRAJLA will convey the project site to the Developer for the fair reuse value of $0 and will also provide a subsidy loan in the amount of $1,572,010.

4. COST OF THE AGREEMENT TO THE AGENCY

The cost to CRAJLA of implementing the proposed Disposition, Development, and Loan Agreement totals $5,468,099 as summarized in the table below. The bulk of the costs are


Page 6 of 8

approximately $2.74 million expended to acquire the Sherman Way and Canby properties, including title, escrow, and recording fees. CRA/LA has also spent just over $108 thousand to perform due diligence investigations for the proposed project, including appraisals, environmental reports, and physical needs assessments. CRA/LA spent an additional $277 thousand on relocating the existing businesses that had been located on the Canby property. Approximately $119 thousand was spent demolishing the obsolete commercial structure on the Canby property in 2008 and in maintaining the properties, including weed abatement, painting, and pest control.

In order to complete the proposed affordable housing development and achieve the level of affordability required by the Agreement, CRA/LA wil! also need to provide additional longterms subsidies for the Project in the amount of $1,572,010.

While the bulk of CRA/LA's expenditures for the project have come from current tax increment revenue from the project area, a portion of the subsidy loan will come from borrowed funds. Specifically, $807,500 will come from a larger taxable bond issuance that was completed in 2010. The coupon rate on the bonds is 5.21 percent. The annual interest payment on the bonds attributable to the Reseda Theater Lofts is $42,111. The present value of those interest costs over the bonds' 30-year term is $647,345.

Therefore, the total cost of the Project to CRA/LA is:

Acquisition & Closing Costs $ 2,744,381

Due Diligence Costs 108,483

Relocation Costs 277,200

Demolition & Holding Costs 118,680

CRA/LA Permanent Subsidy Loan 1,572,010

Present Value of Interest Expense 647,345

Total CRA/LA Costs $5,468,099

CRA/LA's permanent subsidy loan for the Project will accrue interest at a simple rate of 3 percent per year, but will be repayable only to the extent that there are residual receipts available from operations of the completed development (that is, excess cash flow after the payment 0f operating expenses, reserve deposits, any deferred developer fees, and payment of partnership and asset management fees). Current projections show minimal residual receipts payments coming to CRAJLA: the net present value of projected residual receipts payments to CRAJLA over the first 30 years of operations is only $57,038. As is typical with affordable housing developments, CRA/LA is not expected to fully recover its investment in the project because the affordable rents make it impossible for the project to generate sufficient revenue for loan repayment.

5. ELIMINATION OF BLIGHT AND CONFORMANCE WITH 5-YEAR IMPLEMENTATION PlAN

The Reseda Theater Lofts project is located in Earthquake Disaster Assistance Project Area as designated by the Los Angeles City Council after the 1994 Northridge earthquake. The purpose of the designation was "to promote the economic recovery of the communities of Reseda, Canoga Park, Winnetka, and portions of Woodland Hills; to increase job creation;


Page 7 of 8

to provide housing for households at all income levels; and to improve the quality of the environment of the communities that were severely damaged by the Northridge earthquake." Specific goals of the Reseda/Canoga Park Community Redevelopment Plan include:

a. Maintenance and promotion of private sector investment within the Project Area.

b. Development of businesses that serve the identified needs of the community, enhance the commercial environment, and maximize the creation of jobs and economic opportunities for residents.

c. Improvement of the quality of life and environment, including promotion and preservation of a positive image and safe environment for the community.

d. Preservation and expansion of the area's employment base and the restoration of local job opportunities affected by the earthquake.

The Reseda Theater was first built as a movie theater in 1948. The building has been vacant and abandoned since 1988. CRA/LA first acquired the Reseda Theater property in 2004 with the objective of rehabilitating the facility into a multi-purpose entertainment venue. In 2006, CRA!LA also acquired the Canby property in order to provide parking for the rehabilitated entertainment center. The Agency then entered into a disposition and development agreement with a prior developer to undertake the rehabilitation. Entitlements for the rehabilitated entertainment venue were obtained in 2007. Unfortunately, shortly thereafter, the global economic recession rendered the project financially infeasible. In consultation with the community, in 2010, CRAILA issued a Request for Proposals for redevelopment of the site. The Developer's winning proposal for Reseda Theater Lofts called for the development of affordable rental housing on the site with a small amount of retail frontage onto Sherman Way.

The public benefits of the proposed Reseda Theater Lofts project are many:

® Because the Reseda Theater building has been vacant and boarded up for more than two decades, it remains an eyesore on the Sherman Way thoroughfare. Removing the blighte-d theater structure will provide a significant boost to the visual appeal of this section of Sherman Way.

0 The proposed project will create short-term living-wage construction jobs for local workers.

• The new, high-quality apartment structure that will rise in place of the old theater will likely help to spur additional private investment along the boulevard.

@ The project will provide 20 sorely needed units of affordable rental housing for low- and very low-income families and that housing will remain affordable for a full 55 years.

o As the wider economy recovers, the project will likely attract two new retail businesses to the site. Those businesses may bring some long-term jobs to the area as well as generate some additional sales tax revenue for the county.


Page 8 of 8

Thus, the proposed Reseda Theater Lofts project will achieve many of the goals stated in the Five-Year Implementation Plan by removing blight, improving the quality of the commercial environment, attracting new businesses, generating jobs, and creating affordable housing.

ATTACHMENT F

THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF lOS ANGELES, CA

RESOLUTION NO. __

A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY Of THE CITY OF LOS ANGElES; CALIFORNIA REGARDING THE SUBORDINATION OF ITS USE RESTRICTIONS AND DEED OF TRUST PURSUANT TO SECTION 33334.14 OF THE COMMUNITY REDEVELOPMENT LAW FOR THE RESEDA THEATER FAMILY HOUSING, LP RESEDA THEATER lOFTS PROJECT.

WHEREAS, the Community Redevelopment Agency of the City of Los Angeles, California ("CRAJLA") proposes to enter into a Disposition, Development and Loan Agreement ("DDLA") with RESEDA THEATER FAMILY HOUSING,LP ("Developer''), a California- limited partnership, to which the CRNLA will provide financial assistance for the purposes of developing 20 units of affordable rental housing for very low and low income persons or families or households (the "Project"); and~

WHEREAS, the DDLA requires covenants to be recorded against the Project restricting the use of the Project by placing certain limits on the maximum housing costs that can be paid by the home buyer, and the maximum income that can be earned by buyers qualified to purchase such housing (the "Income, Rent, and Homeownership Limits"); and

WHEREAS, the DDLA requires that a Deed of Trust be recorded against the Ownership Project as security for tile. CRNLA Loan; and

WHEREAS, the Developer has obtained commitments of financing from a lender conditioned upon the subordination of the CRNLA's Income, Rent, and Homeownership Limits and Deed of Trust; and 1

WHEREAS, there has been presented to the CRA/LA evidence sufficient on which to find an economically feasible alternative method of financing the Project on substantially comparable terms and cond;tions, but without subordination, is not reasonably available.

NOW, THEREFORE, THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF LOS ANGELES, CALIFORNIA, AND THE CITY COUNCIL OF THE CITY OF LOS ANGELES, CALIFORNIA DO HEREBY RESOLVE AS FOLLOWS:

1. The CRA/LA hereby finds that an economically feasible alternative method of financing the Project on substantially comparable terms and conditions, but without subordination, is not reasonably available.

2. The CRNLA hereby authorizes the Chief Executive Officer ("CEO") of the CRA/LA, or designee, to take such actions as may be necessary in order to subordinate the CRA/LA's Income, Rent, and Homeownership Limits and Deed of Trust to the liens of the lenders

providing financing for the Project, but only upon receipt by the CEO or designee of written commitments from such lenders, reasonably designated to protect the CRAJLA's investment in the event of default, including but not limited to the following:

a) A right of the CRAJLA to cure a default on the loan;

b) A right of the CRAJLA to negotiate with the lender after the notice of default from the lender;

c) An agreement that if prior to foreclosure of the loan, the CRA/LA takes title to the property and cures the default on the loan, the lender will not exercise any right it may have to accelerate the loan by reason of transfer of title to the CRAJLA;

d) A right of the CRA/LA to purchase the property from the Developer at any time after default on the loan.

ADOPTED: ____________ __

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BUILDING SUMMARY - North Site

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n Standard Spaces

BUILDING SUMMARY -Sherman \Ala~

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F'ilr:.~ 3 Reta I I Spaces l Resident Spaces

TOTAL Units

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Retail Space 130 S.F.

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CRA/LA BUILDING COMMUNITIES

cW ... 0, ....

M~ps cr~flted by CRM.A GIS Team

Total Project Size (sq ft):·

Commercial - Retail (sq ft):

Common Area (sq fl):

Residential (sq ft):

Estimated Jobs Created: ConstnJction Jobs (est.):

Permanent Jobs (est.):

Total Development Costs (TOG):

CRAJLA Investment:

CRNLA Investment % of TDC:

Total Housing Units:

Total Affordallla Housing Units:

HGD Very Low Income Units:

HGD Low Income Units:

HCD Moderate Income Units:

Undetermined Affordable Units:

Total Development Cost Per Unit:

22,610 730

3,000

18,880

•t50

4

$9 million

$3 million

31.94%

20

20

4

16

0

0

$433,948

CRAILA Investment Per Restricted Unit: $138,601

Project ID: 1 002 23 Objective Code(s): RP1150

Attachment H

PROJI::~T SUMMARY REPORT

Board Item Number: Board Date: 9/1512011

Project Location Primary Address: 18447 Sherman Way, Reseda, CA 91335

Secondary Address: 7217-7227 Canby Ave. Reseda, CA 91335

Location Description: Existing delapidated vacant theater and adjacent vacant lot (demolished building)

Proposed CRA/lA Action Reseda Theater Lofts Public Hearing and Disposition. Public hearing and various actions related to approval and execution of a Disposition, Development and Loan Agreement with Reseda Theater Family Housing, L.P., for the sale of the CRA/LA owned properties at 18447 Sherman Way and 7217-7227 Canby Avenue at the fair reuse value of $0 and for financing in an amount not to exceed $1,572,010 for the development of the Reseda Theater Lofts mixed use project, in the Earthquake Disaster Assistance Project for Portions of Council District Three

Additional Information NIA

Elected Officials o Council District 3, Dennis P. Zine e County Supervisor District 3, Zev

Yaroslavsky • State Senate District 20. Alex Padilla • Congress District 27, Brad Sherman • Assembly District 40, Bob Blumenlield

Project Description The project includes the redevelopment of the Reseda Theater and the Canby Avenue vacant tot as a mixed use affordable housing development with community serving retail.

Project Type Mixed Use

Cons/ruction Category: New Construction

Type of Housing: Rental Housing

Project Features: • Affordable Housing o Apartments ~ Balconies • Community Room • Gardening I Landscaping • Mixed Use • Restaurant I Food Services • Retail

Developer I Participant{s) Developer: Thomas Safran and Associates

Legal Owner I Borrower: C RAILA

Public Agency Partners: City of Los Angeles Housing Department (LAHD)

CRA.IlA Project Staff • Margarita De Escontrias, Reg ion a I

Administrator • Oscar lxco, Project Manager • IIdia Rodriguez, Construction Supervisor o Tabitha Lam, City Planner • Vicki Gilkey, Assistant Project Manager

Project Activities Completed Activities:

• Issue R F P. 09120110 • CAC Approval, 12114/1 0 • Issue RFP, 12120110 • Issue RFP, 01106/11 • Negotiation of Agreement Begins, 02116111 • Deal Points Meeting, 04/19/11

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lEED ®Attainment level, Type Silver, Formal Certification

Community Benefits o Adaptive Reuse • Area Beautification • Beautification of commercial corridor • Catalytic project • Community Benefits Agreement • Construction Local Hiring • Creation of Affordable Housing • Development of underused lot

Economic Revitalization • Elimination of Blight

Enhance Livability • Improve Image of Area • Improve overall attractiveness of the area • Improves the economic vitality of the area e Increase Supply of Housing Stock

Make business more attractive to the community

• Neighborhood serving retail Neighborhood Stabilization

o New Affordable Covenants Preserve the design of the building

• Prevailing Wage Jobs • Reinvigorate business • Revitalize key commercial.corridor

Strategic Plan Goals Met • 1.1.1 - Create 40,000 construction career-path

jobs. • 1 , 1 .2 - Invest in projects and programs to

provide 2, 000 family-supporting permanent jobs.

• 1.3.1 -Retain and grow employment in each region's key sectors (such as cleantech, biamed, entertainment) ...

• 2.1.1 - Complete construction of at least 5,500 units of affordable housing in Redevelopment Project areas.

CRA.IlA Policies Applied Construction Jobs Local Hiring Program. included in Agreement Contractor I Service Worker Retention, Included in Agreement Contractor Responsibility, Included in Agreement Equal Benefits, Included in Agreement Housing Policy, lncuded in Agreement Living Wage, Included In Agreement Prevailing Wage, Included in Agreement

CRA/LA Policies Not Applied Not Applicable to the Project

• Public Art Policy, NIA • Construction Careers & Project Stabilization,

NIA • Labor Peace Agreement, NIA • S ustainability Consultation Program (Part of

CRAILA Healthy Neighborhoods Policy), NIA

Requesting Board Waiver • Child Care, No

Data last Updated: 916/20 t1 Report Generated: 9/6/2011

CITY Of LOS ANGELES CRA LA - City Clerk Internet...

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