CITY OF Office of the JUNE lAGMAY CITY CLERK City Clerk Council and Public Services Room 395, City Hall HOllY L. WOLCOTT Los Angeles, CA 90012 General Information - (213) 978-1133 Executive Officer Fax: (213) 978-1040

When making inquiries relative to this matter, please refer to the ANTONIO R.VlllARAIGOSA www.cityclerk.lacity.org Council File No. MAYOR

JULY 14, 2011

To All Interested Parties:

The City Council adopted the action(s), as attached, under Council File No.11-0354- S2, at its meeting held July 13, 2011.

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COMMUNICATION

TO: FILE NO. 11-0354-S2

FROM: COUNCILMEMBER HERB WESSON, CHAIR HOUSING, COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE

COMMUNICATION FROM CHAIR, HOUSING, COMMUNITY AND ECONOMIC DEVELOPMENT COMMITTEE relative to funding CRA activities in the region and Watts.

Recommendations for Council action, as initiated by Motion (Parks - Hahn):

1. INSTRUCT the Chief Legislative Analyst (CLA) to work with the Community Development Department (COD) and the Community Redevelopment Agency (CRA) to ensure that the policy and intent to fund the South Los Angeles Region and Watts as part of the Cooperation Agreement between the City and the CRA (Council file No. 11-0086) is not adversely impacted as a result of the transfer of properties to the City.

2. INSTRUCT the CLA, City Administrative Officer (CAO), COD and CRA to immediately identify approximately $2.5 million in Community Development Block Grant or other resources to continue to support the CRA's operations and projects in the South Los Angeles Project Areas and Watts during Fiscal Year 2011-12 and to ensure that there are sufficient resources to continue the South Los Angeles work program delivery, as budgeted, through the end of Fiscal Year 2010-11 and in future years.

3. DIRECT the CLA and CAO, with the assistance of the COD and the CRA, to report to the City Council and report directly to Council Districts Eight and 15, within 15 days regarding a plan to support the CRA's operations and projects in the South Los Angeles Project Areas and Watts during Fiscal Year 2011-12 and the feasibility of using PY 37 Program Income from the properties that were transferred to the City by the CRA (Council file No. 11-0354) to support the operations and projects in the South Los Angeles Region and Watts.

4. AUTHORIZE the transfer of $750,000 in ground lease revenues to the CRA South Los Angeles Region to support operations and work program associated with the following specific purposes:

" Crenshaw Corridor Prop 1C

lit Marlton Square

II South Los Angeles Redevelopment Plan Manager

II Vermont/Manchester

" Watts Cultural Crescent

5. INSTRUCT the CLA and CAO to report regarding the CRA retaining revenue from the leases (California Plaza Towers One and Two, Omni Hotel and MLK Shopping Center) and subsidies in future fiscal years for the South Los Angeles and Los Angeles Harbor Regions as part of the report to Council on the CRA's Fiscal Year 2011-12 Budget.

Fiscal Impact Statement: Neither the City Administrative Officer nor the Chief Legislative Analyst has completed a financial analysis on this report.

Community Impact Statement: None submitted.

SUMMARY

At a regular meeting held on June 29, 2011, the Housing, Community and Economic Development Committee considered Motion (Parks - Hahn) relative to funding CRA activities in the South Los Angeles region and Watts. After an opportunity for public comment was held, the Committee recommended Council add recommendations regarding the transfer of ground lease revenues and report backs on the CRA retaining revenue from leases. The Committee then recommended that Council approve the recommendations contained in the Motion as amended. This matter is now forwarded to the Council for its consideration.

Respectfully submitted,

HERB WESSON, CHAIR HOUSING, COMMUNITY, AND ECONOMIC DEVELOPMENT COMMITTEE

JUL 1 3 2011 MEMBER VOTE WESSON: YES REYES: ABSENT lOS ANGElES cnv COUNCil ALARCON: ABSENT CARDENAS: ABSENT PERRY: ABSENT FORTHWITH SG 6/29/11 CD 8,15 #11/11-0354-S2_rpt_hced_6-29-11.doc Not Official Until Council Acts MOTION

On March 8, 2011, the Council approved various actions related to the transfer of properties to the City of Los Angeles as repayment of20-year Community Development Block Grant (CDBG) loans (C.F. 11-0354). The transfer included two Cal Plaza properties and the Martin Luther King Shopping Center. The combined lease payments from these properties are approximately $4 million annually.

Historically, the lease payments have been considered as General Revenue by the Community Redevelopment Agency (Agency). As such, these funds have been used to provide subsidies for both operations and projects in deficit-project areas in the South Los Angeles Region and Watts Redevelopment Project Area.

In Fiscal Year (FY) 2009-10, the South Los Angeles Operating Subsidy was $2.1 million and the Project Subsidy was $2.8 million. In FY 2010-11, the Operating Subsidy is $1.9 million and the Project Subsidy is $2.4 million. The South Los Angeles Project Areas had anticipated a subsidy in FY 2011-12 of approximately $2.5 million; however, because the properties were transferred to the City, the lease revenue (Agency General Revenue) is no longer available to support the operations and work program in the South Los Angeles Project Areas, including Crenshaw, Crenshaw/Slauson, Broadway/Manchester, Vermont Manchester, and Watts and Watts Corridor. Inasmuch as the South Los Angeles Region is a vital part of redevelopment, and in order to continue to combat slum and blight in our poorest communities, it is imperative that staff be instructed to identify the funds to ensure that South Los Angeles and Watts are not adversely impacted as a result of the property transfers.

I THEREFORE MOVE that the Council:

1. Instruct the Chief Legislative Analyst (CLA) to work with the Community Development Department (COD) and the Community Redevelopment Agency (CRA) to ensure that the policy and intent to fund the South Los Angeles Region and Watts as part of the Cooperation Agreement between the City and the Community Redevelopment Agency (C.F. 11-0086) is not adversely impacted as a result of the transfer of properties to the City;

2. Instruct the CLA, CAO, COD and CRA to immediately identify approximately $2.5 million in Community Development Block Grant (CDBG) or other resources to continue to support the Agency's operations and projects in the South Los Angeles Project Areas and Watts during Fiscal Year 2011-12 and to ensure that there are sufficient resources to continue the South Los Angeles work program delivery, as budgeted, through the end of Fiscal Year 2010-11 and in future years; and

3. Instruct the CLA and the CAO, with the assistance of the COD and the CRA, to report to the City Council, and report directly to Council Districts 8 and 15, within 15 days regarding a plan to support the Agency's operations and projects in the South Los Angeles Project Areas and Watts during Fiscal Year 2011-12, and the feasibility of using PY 37 Program Income from the properties that were transferred to the City by the Community Redevelopment Agency (C.F. PTEOII-0354) to support the operations and projects in th7LOS An:eles Regio~ Watts.

JUL 1 3 Z011~l / PRESENTED BY ~ t? .~ (/ c- BERNARD C. PARKS .OS ANGElES en COUN It / Councilmember, 8th District fOR"fHVVIT SECONDED

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