January 19, 1999

Honorable Board of Commissioners
Housing Authority
of the County of Los Angeles
383 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, California 90012

Honorable Board of Commissioners
Community Development Commission
of the County of Los Angeles
383 Kenneth Hahn Hall of Administration
500 West Temple Street
Los Angeles, California 90012

Dear Commissioners:

APPROVE DEVELOPMENT GRANT AGREEMENT FOR 2241 WILLIAMS STREET
AS PART OF THE VILLAGES AT CABRILLO DEVELOPMENT IN LONG BEACH (4)
(3 Vote)

IT IS RECOMMENDED THAT YOUR BOARD:

Approve a Development Grant Agreement, presented in substantially final form, between the Community Development Commission and Century Villages at Cabrillo, Inc. (the Owner), a California nonprofit corporation, to provide the Owner with $200,000 in construction and permanent financing to renovate and convert a building located at 2241 Williams Street at the former Savannah/Cabrillo Naval Housing Facility in the City of Long Beach, for use as a 13-bedroom emergency and transitional housing facility for homeless families, disabled persons, and elderly individuals.

Authorize the Executive Director to execute the Development Grant Agreement, using $150,000 in McKinney Homeless Assistance Funds and $50,000 in Section 8 administrative funds, to be effective following approval as to form by County Counsel and execution by all parties.

Authorize the Executive Director to incorporate $150,000 in McKinney Homeless Assistance Funds into the Commission's approved budget.

4. Authorize the Executive Director to execute all related documents necessary for implementation of the project, following approval as to form by County Counsel.

PURPOSE OF RECOMMENDED ACTION:

The purpose of this action is to approve a Development Grant Agreement between the Commission and the Owner, in order to provide the Owner with financing to renovate and convert a building at the former Savannah/Cabrillo Naval Housing Facility into emergency and transitional housing for homeless families, disabled persons, and the elderly. The development will be known as the Villages at Cabrillo.

JUSTIFICATION:

The Development Grant Agreement will provide funds necessary to implement the Villages at Cabrillo project, a phased re-development of the former U.S. Naval Station housing complex in the City of Long Beach.

FISCAL IMPACT:

There is no impact on the County general fund.

FINANCING:

Due to the size and complexity of re-developing the entire naval base, the project has been divided into two development phases. Phase One of the Villages at Cabrillo will include 88 units within 17 buildings. The subject property is part of the Phase One project, and has a construction budget of $385,000. The Commission will fund $200,000 of this amount, with the balance funded by the Century Housing Corporation. The Commission's $200,000 grant will be used for construction and permanent financing, and will be comprised of $150,000 in McKinney Homeless Assistance funds and $50,000 in Section 8 administrative funds. A Financial Analysis is provided as Attachment A.

With an overall cost of over $14 million, Phase One has received over $10 million in funding commitments from several sources, including the City of Long Beach, Century Housing Corporation and the Veterans Administration. Development and construction financing is being put in place for specific buildings, even though all Phase One funding sources have not been finalized. In certain cases, Century Housing Corporation has advanced construction financing prior to closing on other funding sources. For this reason, the Commission's funds may be used by the Owner to reimburse CenturyHousing Corporation for funds previously advanced for 2241 Williams Street. These funds will be disbursed to the Owner in a series of five progress payments, based on construction completion thresholds outlined in the Development Grant Agreement.

FACTS AND PROVISIONS/LEGAL REQUIREMENTS:

The Villages at Cabrillo is one of the most comprehensive naval base re-use developments in the country, resulting from the closure of the Long Beach Naval Station in accordance with the Defense Base Closure and Realignment Act of 1990. The development will function as a residential planned community with social services directed primarily toward homeless veterans and their families, as well as homeless families, disabled persons, and the elderly.

The subject property, which contains four two-story three-bedroom units, will be renovated to include 13 bedrooms, two offices with reception areas, two kitchen/dining areas, eight bathrooms, one handicap accessible bathroom, and common living areas. The work will be performed by a general contractor procured by the Developer.

The Commission has received a request for financial assistance from Transition Point, LLC (the Developer) on behalf of the Owner, for a grant of $200,000 to assist in the renovation and adaptive re-use of the subject property. These funds will be provided to the Owner through the proposed Development Grant Agreement. Under this agreement, the property will be used as emergency and transitional housing for 20 years, with Catholic Charities of Los Angeles, Inc. as the initial provider of on-site support services. Catholic Charities is a nonprofit, nonsectarian community-based provider of human services, and will staff and operate the property for a three-year period under a lease agreement with the Owner. Catholic Charities, which will occupy office space in the subject property, will provide case management, meals, advocacy, and information and referral services. With the consent of the Commission, Catholic Charities may continue as the service provider after the three-year period, or a new Commission-approved service provider may be substituted if Catholic Charities is unwilling or unable to continue occupancy.

In order to qualify for occupancy and services, clients occupying the subject property must be homeless, disabled or elderly, and must earn less than 80 percent of the area median income for the Los Angeles-Long Beach Metropolitan Statistical Area (MSA). Should rents be charged in the future, the rent amount will not exceed 30 percent of 80 percent of the area median income for the Los Angeles-Long Beach MSA.

The proposed project is being federally funded, and is not subject to the requirements of the Greater Avenues for Independence (GAIN) Program implemented by the County of Los Angeles. Instead, the Owner must comply with Section 3 of the Housing and Community Development Act of 1968, as amended, which requires that employment and other economic opportunities generated by certain U.S. Department of Housing and Urban Development (HUD) assistance be directed to low- and very low-income persons, particularly to persons who are recipients of HUD housing assistance.

This matter is being presented to your Board at this time in order to expedite theproject. It will be presented to the Housing Commission at its next regularly scheduled meeting.

The Development Grant Agreement is being presented in substantially final form. It will be effective following approval as to form by County Counsel and execution by all parties.

CONTRACTING PROCESS:

The Owner and Developer were selected through a public hearing process which was approved by HUD, the Department of Defense, and the City of Long Beach. The Commission did not participate in this process. Therefore, this opportunity was not posted on the County Office of Small Business Web Site.

IMPACT ON CURRENT PROGRAM:

Approval of the Development Grant Agreement will benefit the community by increasing the total amount of affordable units and special housing services in the County.

Respectfully submitted,

CARLOS JACKSON
Executive Director

Attachments: 2