THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF , CA

M E M O R A N D U M 3

DATE: APRIL 2, 2009 CT2000 CI2000 TO: CRA/LA BOARD OF COMMISSIONERS

FROM: CECILIA V. ESTOLANO, CHIEF EXECUTIVE OFFICER

RESPONSIBLE PARTIES: DAVID RICCITIELLO, REGIONAL ADMINISTRATOR LEN BETZ, PROJECT MANAGER MARTHA ESTRADA, ADMINISTRATIVE SPECIALIST

SUBJECT: AMENDMENT TO CONTRACT WITH SRO HOUSING CORPORATION IN AN AMOUNT NOT TO EXCEED $1,550,000 FOR THE CONTINUED PROGRAMMING, OPERATION, MAINTENANCE AND ADMINISTRATION OF EMERGENCY AND OTHER HOUSING DEVELOPMENTS AND SERVICES, THE JAMES M. WOOD COMMUNITY CENTER, SAN JULIAN PARK, AND GLADYS PARK IN THE CITY CENTER AND CENTRAL INDUSTRIAL REDEVELOPMENT PROJECT AREAS DOWNTOWN REGION (CD 9 AND 14)

RECOMMENDATIONS

That the CRA/LA Board of Commissioners, subject to City Council review and approval, authorize the Chief Executive Officer (CEO), or designee, to execute amendment #2 to CRA/LA Contract #503086 with SRO Housing Corporation for advanced quarterly payments in a total amount not to exceed $1,550,000, from $3,100,000 to $4,650,000, for the continued programming, operation, maintenance, and general administration for emergency and other housing developments and services, the James M. Wood Community Center, San Julian Park, and Gladys Park in the City Center and Central Industrial Redevelopment Project Areas and extending the term of the contract from April 1, 2009 to March 31, 2010.

SUMMARY

The recommended action, subject to City Council review and approval, will authorize Amendment #2 of CRA/LA Contract #503086 between Housing Corporation (“SRO Housing”) and CRA/LA to provide continued funding in an additional amount not to exceed $1,550,000 (increasing the contract from $3,100,000 to $4,650,000) and extending the contract from April 1, 2009 to March 31, 2010 for the continued programming, operation, maintenance and general administration of emergency and other housing developments and services, the James M. Wood Community Center, San Julian Park, and Gladys Park in Central City East.

SRO HOUSING CORPORATION CONTRACT #503086 2

This is the third year of the SRO Housing monitoring and administrative cost shortfall due to the lack of requisite Community Development Block Grant (“CDBG”) funding from LAHSA through the Consolidated Plan process. SRO Housing again faces a budget shortfall of $1,550,000 that would have an immediate and adverse impact on the Central City East community, which spans portions of both the City Center and Central Industrial Redevelopment Project Areas (see Attachment A) if not funded by CRA/LA. The contract amendment in the amount of $1,550,000 for the Fiscal Year 2009-2010 year provides for labor, programming, operations, maintenance and administration for the James M. Wood Community Center, San Julian Park, Gladys Park, and emergency and other housing developments and services (see Attachment B), will assist in the elimination of blight and reduction of and will assist in the general administration and monitoring of transitional housing owned by SRO Housing. Funds would be advanced on a quarterly basis.

The provision of these funds will promote the objectives of the Redevelopment Plans for the Central Industrial and City Center Redevelopment Project Areas by providing the public and social services and facilities necessary to address the needs of the various social, medical, and economic problems of Central City residents; and further the fundamental purpose of redevelopment law to maintain and expand the supply of low and moderate income housing, to expand employment opportunities for jobless, underemployed and low income persons, and to provide an environment for the social, economic and psychological growth and well-being of all citizens.

Over the past twenty-four months, SRO Housing has submitted the required status reports on a quarterly basis as well as complied with applicable CRA/LA policies regarding Equal Opportunity, Affirmative Action, Living Wage, Equal Benefits, Worker Retention and Contractor Responsibility.

RE

March 26, 2008 – City Council approval of Amendment #1 to Contract #503086 with SRO Housing Corporation.

March 6, 2008 – CRA/LA Board of Commissioners authorized the negotiation and execution of Amendment #1 to Contract #503086 between SRO Housing and the CRA/LA to provide emergency funding in an amount not to exceed $3,100,000 for an accumulated two year period with the 2nd year beginning April 1, 2008.

SOURCE OF FUNDS

City Center AB1290 and Central Industrial AB1290 Funds

PROGRAM AND BUDGET IMPACT

The recommended action is consistent with the Amended FY09 Budget and Work Program for the City Center and Central Industrial Project Areas.

ENVIRONMENTAL REVIEW

SRO HOUSING CORPORATION CONTRACT #503086 3

The recommended actions do not constitute a project as defined by the California Environmental Quality Act.

BACKGROUND

On March 15, 2007, the CRA/LA Board of Commissioners authorized the negotiation and execution of an agreement between SRO Housing and the CRA/LA to provide emergency funding in an amount not to exceed $1,550,000 for one year beginning April 1, 2007. This action was taken as a result of the City Council’s action on March 7, 2007 relative to the inability of LAHSA to fund SRO Housing because of decreased CDBG funding. Contract #503086 between CRA/LA and SRO Housing was executed on April 12, 2007.

On March 6, 2008, the CRA/LA Board of Commissioners authorized the negotiation and execution of Amendment #1 to Contract #503086 between SRO Housing and the CRA/LA to provide emergency funding in an amount not to exceed $3,100,000 for a 2nd year of funding beginning April 1, 2008. This action was taken as a result of the Mayor’s action on January 9, 2008, in transmitting his proposed 34th Year Consolidated Plan for the expenditure of Community Development Block Grant (CDBG) and HOME funds. Mayor Villaraigosa directed the CRA/LA, subject to applicable redevelopment law, to prepare, with assistance from the City of Los Angeles Community Development Department (CDD), a report detailing requirements to transfer up to $4 million in CRA/LA monies to the Los Angeles Homeless Services Authority (LAHSA) for their Homeless programs and for the subject SRO Housing given LAHSA’s inability to fund SRO Housing because of decreased CDBG funding. The funding was to cover the continued programming, operation, and maintenance of the James M. Wood Community Center, San Julian Park, Gladys Park, and operation of emergency and other housing services in Central City East. An amendment to Contract #503086 between CRA/LA and SRO Housing was executed on April 8, 2008 for the period of April 1, 2008 to March 31, 2009. Under terms of the contract SRO Housing has provided quarterly reports documenting the services provided under the subject agreement.

The recommended action provides for a third year of funding to SRO Housing. Without this one year continuation of funding, SRO Housing would be forced to do the following, as similarly stated in their request for funding over the past two years:

- Lay off a minimum of 27 to a maximum of 31 employees:

- Staff positions at risk consist of 15 security guards, 4 housing workers, 4 park workers, and 8 trained maintenance workers. Approximately 40% of SRO Housing employees are comprised of formerly homeless or chronically unemployed individuals.

- Currently 15 security guards patrol the around SRO Housing properties 24 hours a day. Over 70% of SRO Housing's residents are either senior citizens or seriously disabled persons on extremely low fixed-incomes and are often prime targets for victimization.

- Cease management and operation of San Julian and Gladys Parks, the only green spaces located in the Skid Row community. Both parks are open 7 days-a-week and provide recreational and socialization activities. This is the only open space for the homeless, elderly, children and persons with disabilities in the community.

SRO HOUSING CORPORATION CONTRACT #503086 4

- Cease management and operation of the James M. Wood Community Center, a facility that serves approximately 75 to 100 senior meals per day, regularly hosts 10 to 12 substance abuse recovery programs, and provides health screenings, life skills training, and other community building activities.

- Reduce the availability of up to 200 units/beds, and result in the potential shutdown of a facility due to layoffs of housing and maintenance staff. SRO Housing previously prioritized which single-room occupancy hotels and shelters would need to shut down.

In addition to the above, this funding shortfall would negatively impact the overall safety, security, and welfare of the residents and businesses of the Skid Row community and surrounding areas.

SRO Housing currently has 15 CRA/LA loans related to the development of affordable housing projects. On December 31, 2008 eight of the fifteen loans were restructured and all existing loans are in good standing.

In 2006, Los Angeles Homeless Services Authority (LAHSA) issued a revised Request for Proposal (RFP) for the Community Development Block Grant Program (CDBG). SRO Housing had received funding under this program for over 10 years and they anticipated receiving funding for and additional three years. Unfortunately, SRO’s Housing’s proposal fell short of the minimum threshold and they were locked out of funding consideration for three years. A new RFP is scheduled to be released in the fall of 2009 and SRO Housing will apply for funding. SRO Housing is actively seeking support from other funding sources as well, for the operation, maintenance, and safety of Gladys Park and San Julian Park, as well as James M. Wood Community Center.

SRO Housing is a non-profit, community-based organization dedicated to building a healthy community for homeless and very low-income individuals in the Central City East community of Downtown Los Angeles, more commonly known as “Skid Row”. Since 1984, SRO Housing has pursued its mission of community revitalization by providing clean, safe and affordable housing, managing public spaces, and administering needed social support services to the residents of Skid Row, a historically disenfranchised, marginalized and -stricken community. As the largest developer of affordable housing for the homeless in the western United States, SRO Housing has been honored with a “Developer of the Year Award” twice, in 1999 and 2006, by The Southern California Association of Non-Profit Housing (SCANPH).

SRO Housing houses over 1,700 people in single room occupancy housing units in 25 residential facilities (emergency, transitional and permanent); serves nearly 4,000 meals in its emergency shelter and senior meals program as well as delivering over 8,000 pounds of food and fresh produce to all permanent-housing sites; programs and manages two public parks (San Julian Park and Gladys Park); and operates the James M. Wood Community Center. SRO Housing connects its residents with a wide range of supportive services including case management, recovery programs for persons with mental illnesses and/or substance addictions, employment assistance, health screenings, and food services. In addition, SRO Housing provides its residents with a way to regain basic living skills through classes in cooking, laundry, and money management in order to help residents to rebuild and remain in a normative living situation.

The Central City East area of Downtown Los Angeles, also known as “Skid Row”, is home to one of the largest populations of transient (homeless) persons in the United States. In the late SRO HOUSING CORPORATION CONTRACT #503086 5

1970’s, James M. Wood, who served as the CRA/LA Chairman, established that any plan to revitalize Downtown Los Angeles must include the redevelopment of the Central City East (Skid Row) area to address the area’s dire housing, social, medical and economic conditions. Addressing these needs is also a goal of the City Center and Central Industrial Redevelopment Projects. Skid Row is bounded by Third, Seventh, Main, and Alameda Streets, encompasses approximately 50 square blocks, and is one of the most impoverished neighborhoods in the western United States. Skid Row residents, whether homeless or housed, are often poor, elderly, disabled, mentally ill, addicted to drugs/alcohol, chronically ill, and/or unemployed.

In 1977, the CRA/LA began implementation of a redevelopment plan for the Downtown Los Angeles Central City East area to preserve and expand the single room occupancy hotels in the area. In pursuit of that plan, Single Room Occupancy (SRO) Housing Corporation was founded by the CRA/LA in February 1984 to acquire and rehabilitate single room occupancy hotels in the area, and to provide services to stabilize the community and its residents. From 1984 to 1997, the CRA/LA provided ongoing funding to nonprofit social service providers, including SRO Housing, for services in the Central City East area of downtown Los Angeles. However, due to CRA/LA tax increment shortfalls in the mid-1990’s, funding has since been provided by LAHSA, the Los Angeles Housing Department (LAHD), and the Community Development Department (CDD). Current funding for SRO Housing is available from AB1290 funds generated by the recently validated redevelopment plans for the Central Industrial and City Center Redevelopment Project areas.

The recommended actions are supported by Council Members Jan Perry (CD9) and José Huizar (CD14).

Cecilia V. Estolano Chief Executive Officer

By

______Glenn F. Wasserman Chief Operating Officer

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

Attachments:

A Location Map of SRO Housing Corporation Service Area B Proposed SRO Housing Budget for Contract Amendment