ANGEL. FRANK T. MARTINEZ · .ITY OF LOS Office of the City Clerk CITY CLERK Council and Public Services KAREN E. KALFAYAN Room 395, City Hall Executive Officer , CA 90012 Council File Information - (213) 978-1044 General Information - (213) 978-1133 When making inquiries Fax: (213) 978-1040 relative to this matter refer to File No. CLAUDIA M. DUNN ANTONIO R. VILLARAIGOSA Chief, Council and Public Services Division MAYOR

01-2069-85

CD 8

March 23, 2006

Councilmember Parks Controller, Room 300 Chief Legislative Analyst Accounting Division, F&A City Administrative Officer Disbursement Division City Attorney Community Redevelopment Agency

RE: AN EXCHANGE OF FUNDING SOURCES BETWEEN WORK OBJECTIVES FOR THE MARLTON SQUARE MIXED-USE DEVELOPMENT PROJECT AND RELATED ACTIONS

At the meeting of the Council held March 8 1 2006, the following action was taken;

Attached report adopted ...... ·~__ X__ _ Attached motion (-) adopted ...... ·~----~ Attached resolution adopted ...... ·~----~ FORTHWITH ...... ______Mayor concurred ...... ·········~~0~3~-~1~7~--0~6~ To the Mayor FORTHWITH ...... ; ...... ········~-~x~-~ Motion adopted to approve communication recommendation(s) ...... ______Motion adopted to approve .committee report recommendation(s) ···~----~ Ordinance adopted ...... ______Ordinance number ...... , ...... ______Publication date ...... ______\µ !L}YJ~ PLACE IN FILES

·city Clerk APR O~ 2006 er

AN EQUAL EMPLOYMENT OPPORTUNITY - AFFIRMATIVE ACTION EMPLOYER .f RECENED OFFiCE OF THE MAYO ri• CITY CL.ER~:·s OFFICE R~; r i=-, 'r' r. ri Mayor's Titne'St'amp City Clerk's Time Stamp ., 2006 rlAR .IO AM 7: 51 1.ffi6 AR IO AM 7=' Q8 FORTHWITH I CITY OF LOS .t1rJGL:LES ··ITY CLERK . I BY~__,..--;::;'IDP/'PuiUTYTV

SUBJECT TO MAYOR'S APPROVAL

COUNCIL FILE NO. 01-2069-85 COUNCIL DISTRICT NO. 8

COµNCIL APPROVAL DATE MARCH ·8, 2006 ~ s i,2~ ::i:: I 111~-:; ::o~ C)11 o )2 9? -n ._ ' C) 0 HAR 2 O2006 LAST DAY FOR MAYOR TO ACT "° m (10 Day Charter requirement as per Charter Section 341)

DO"NOT OW THIS LINE - FOR MAYOR OFFICE USE ONLY

*DISAPPROVED

*Transmit objections in writing'pursuant to Charter Section 341

DATE OF MAYOR APPROVAL OR DISAPPROVAL MAR 1 7 'Z006

MAYOR ,,. kw TO THE COUNCIL OF THE- File No. 01-2069-SS CITY OF LOS ANGELES

Your HOUSING, COMMUNITY, AND ECONOMIC DEVELOPMENT COMMITTEE reports as follows: Yes No 1 Public Comments XX I HOUSING, COMMUNITY, AND ECONOMIC DEVELOPMENT COMMITTEE REPORT relative to an exchange of funding sources between work objectives for the Marltori Square Mixed-Use Development Project and related actions.

Recommendations for Council action, SUBJECT TO THE APPROVAL OF THE MAYOR: • I

1. AUTHORIZE the Acting Chief Executive Officer, Community Redevelopment Agency ,(Agency), or designee, to increase the Purchase Order with the law firm of Goldfarb & Lipman by $83,000 from $300,000 to $383,000 for various legal services including the amendment preparation of three implementation Agreements needed for the Marlton Square single-family housing development, the condominium housing development, and retail center located on property bounded by Martin Luther King ~r. Boulevard on the north, Marlton Avenue on the east, Santa Rosalia Drive on the south, and Buckingham Road on the west.:

2. APPROVE the use of the previously allocated $1,000,000 in Urban Development Action , Grant (UQAG) funds for the Marlton Square Mixed-Use Development Project as a source of fynds for the Agency's Redevelopment Plan Amendment work objective (ST6650) to assist the Agency in. the potential merger and/or expansion of various redevelopment project are , as including Crenshaw, Creni;;haw / Slauson, Western I Slauson; Brqadway I Manchester and Vermont I Manchester as plan amendments to better achieve financial self-sufficiencies and the expansion of economic development opportunities.

3. AUTHORIZE the Mayor, or designee, to negotiate and execute.~n UDAG Cooperation Agreement in .an amqunt not to exceed $1,000,000 to provide a source of financing to the Agency's Redevelopment Plan Amendment work objective (ST6650) for eligible economic development activities as set forth in No. 3 above, subject to the'approval of the City Attorney as to form and legality.

4. AUTHORIZE the Acting Chief Executive Officer, Agency, or designee, to amend the Agency's Fiscal Y~ar 2005-06 Budget to reflect the receipt of $1 ;000,000 in UDAG funds into the ST6650 work objective.

5. AUTHORIZE the Controller, upon proper demand from the Acting Chief Executive Officer, Agency, or designee, and upon execution of the UDAG Cooperation Agreement between the C,ity and Agency, t9 transfer to the Agency an amount not to.exceed $1,000,000 to the Agency from Fund 303, Department 46, Account T240, Marlton ~quare.

Fiscal Impact Statement: The Chief Legislative Analyst (CLA) reports that this action will not impact the General Fund. Approval ·of this action simply exchange funding sources between work ,objections to reflect the charc1cter of the funds. Summary: - In a report to the Housing, Cqmmunity, and Economic Development Committee dated February 27, 2006 (attached to the Council file), the CLA states that the Agency requests authorization to transfer$ 1 million from the Redevelopment Plan Amendments work objective to the Marlton Square Project to be replaced by an equal amount in UDAG previously allocated to the project. The CLA reports that this exchange or "swap" of funding,sources is necessary because the intended residential use of the UDAG funds is an ineligible activity.

According to the CLA, the UDAG funds will now be used by the Agency in the preparation of necessary reports and analyses relative to the potential merger and / or expansion of various redevelopment project areas to better achieve financial self-sufficiency. The redevelopment areas under review include: Crensha~. Crenshaw/' Slauson, Western I Slauso~,I Broadway/ Manchester, and Vermont I Manchester. The studies and.reports necessary for plan amendment process include: physical and economic light analysis, environmental impact reports, and financial analysis. UDAG funds must be used for an eligible economic development activity. The proposed use of the UDAG is an eligible economic development-activity.

The CLA goes on to report that the Agency also requests authority to increase its contract with Goldfarb and Lipman by .. $83,000 from $300,000 to $383,o"OO for legal services relative to the project. The Goldfarb and Lipman budget has been amended from time-to-time to reflect additional needed legal services. As the project moves into its implementation pha~e, additional outside legal counsel will be necessary for transactional services (document preparation, escrow agreements, • . 1 legal analysis and various other legal services related to acquisition, relo~ation and development).

On February 2, 2006, the Agency Board of Commis.sioners approved staff recommendations for the exchange of funding sources and an increase in the Agency's work order amount with Goldfarb and Lipman, and related actions. The CLA supstantially concurs, but states that Recommendation No. 2 of the Agency report has been rendered moot by the Council action taken September 6, 2005, .relative to Marlton Square.

At its meeting held February 28, 2006, the Housing, Community, and Economic Development Committee recommended that Council authorize the Agency to increase its work order amount with Goldfarb and Lipman by $83,000, as recommended by the CLA and the 1Agency Board. The 1 Committee further recommended that Council approve additional recommendations submitte.d by the CLA in Committee and as shown above.

Respectfully submitted,

HOUSING, COMMUNITY, AND ECONOMIC DEVELOPMENT COMMITTEE '/~· ~ MEMBER VOTE / WESSON YES REYES YES CARDENAS ABSENT fZe'PT. GARCETTI ABSENT 1 PERRY YES ADOPTED MAR O 8 2006 JAW 3/2/06 CD8 I / #012069.sS.wpd TO nm MAYOR FORTHWITH 2 COUNCIL VOTE

Mar 8, 2006 10:27:18 AM, #2

Items for which Public Hearings Have Been Held - Items 4- 51 Voting on Item(s): 4-ll,13-19,21-30,33-44,46,48-50 R0ll Call

CARDENAS Yes GREUEL Yes HAHN Absent HUIZAR Yes LABONGE Absent PADILLA Yes PARKS Yes PERRY Yes REYES Yes ROSENDAHL Yes SMITH Yes WEISS Yes WESSON. Yes ZINE Yes *GARCETTI Yes Present: 13, Yes: 13 No: 0

,,

I ,• HOUSING, COMMUNITY, AND ECONOMIC DEVELOPMENT COMMITTEE NOTIFICATION OF COUNCIL ACTION

j Council File No. 0 \- 2-~~ ~ S~ I

~Cou~cil Member(s) ____8______1 ______o Interested Department------....,..------[' ~.Mayor ~wtthou~ file)------f Chief Legislative Analyst------­ r:p. City Administrative Officer------

~ Controller ______·o City Clerk ______

o City Clerk, Chief Administrative Services ------,---~------

1 o Treasurer------'------.....------__,·!______"1) City Attom~y (with blue sheet I wi~eet) ______

D. General Services Department------

0 Departtpent of Transportation ------~---,.------0 Personnel Department ______

D Los Angeles Housing Department ------'------o Community Development Department, General Manager, Clifford Graves _____ o cc: Contact Person . ·~Community Redevelopment Agency ______.______

D Board-ofPublic Works D Workforce Investment Board ______. o Workforce Investment Board, Youth Council·------0 _...,....______....,..- ______

D ~1 - Additional Recommendations:

3. Approve the use of the previously allocated $1,000,000 in UDAG funds for the Marlton Square Mixed-Use Development Project as a source of funds for the Agency's Redevelopment Plan Amendment work objective (ST6650) to assist the Agency in the potential merger and/or expansion of various redevelopment project areas including <;renshaw; Crenshaw/Slauson, Western/Slauson, Broadway/Manchester and Vermont/Manchester as Plan Amendments to better achieve financial self-sufficiencies and the expansion of economic development opportunities; 4. Authorize the Mayor, or designee, to negotiate and execute an l'.JDAG Cooperation I Agreement in an amount not to exceed $1,000,000 to provide a source of financing to the Agency's Redevelopment Plan Amendment work objective (ST6650) for eligible economic development activities as set forth in No. 3 above, subject to the approval of the ~ity Attorney as to form; 5. Authorize the Agency's Acting Chief Executive Officer, or designee, to amend the Agency's FY06 Budgetto reflect the receip(of $1,000,000 in UDAG funds into the I ST665ffwork objective; and, 6. Authorize the City Controller, upon proper demand from the Agency's Acting Chief Executive Officer or designee and upon execution of the UDAG Cooperation Agreement between the City and Agency, to transfer to the Agency an amount not to exceed $1,000,000 to the Agency from Fund 303, Department 46, Account T240, Marlton Square. REPORTOFTHE • CHIEF LEGISLATIVE ANALYST

DATE: February 27, 2006

TO: Housing, Community and Economic Development Comrri'htee

FROM: Gerry F. Mille~ Chief Legislative Analyst

SUBJECT: Marlton Square - UDAG Funds.

Summary: The Community Redevelopment Agency (CRA) is requesting authorization to transfer $1.0 million from its Redevelopment Plan Amendments work objective (ST6650) to t}:le Marlton Square Mixed­ Use Project (Project) to be replaced by an equal amount ($1.0 million) in Urban Demonstration Action Grant funds (UDAG) previously allocated to .the Project. This exchange or "swap" of funding sources is necessary because the intended residential use ofthe UDAG funds is an ineligible activity.

The UDAG funds will now be used by the Agency in the preparation of necessary reports and analyses relative to the potential merger and/or expansion of various redevelopment project areas to better achieve financial self-sufficiency. The redevelopment areas under review include: I Crenshaw, Crenshaw/Slauson, Western/Slauson, Broadway/Manchester and Vermont/Manchester. The studies and reports necessary for plan amendment process include: Physical and Economic Blight Analysis, Environmental Impacts Reports and Financial Analysis'. The use ofUDAG funds must be used for an eligible economic development activity. The propo~ed use of the UDAG is an eligible economic development-activity.

The Agency is also requesting to increase its contract with Goldfarb and Lipman by $83,000 from $300,000 to $383,000 for legal services relative to the Project. The Agency transmittal on this matter dated February 2, 2005 provides sufficient justification for the requested increase in legal services. The Goldfarb and Lipman budget has been amended from time-to-time to reflect additional needed legal services. The contract.was last amended in April 2005 by an increase of$60,000 from $240,000 to $300,000. As the Project moves into its implementation phase, additional outside legal counsel will be necessary for transactional services ( document preparation, escrow agreements, legal analysis and various other legal services related to acqi.;tisition, relocation and development).

• I -~~ •• ,. I ----·-·· ·-_:,_·._ ~- l>•\ On September 6, 2005, the Council adQpted a.report from the Housing, Community and Economic , ~ . ' -'\' Development Committee, as amended(i'ncludirig the following recommendation: 2. That the Council authorize and approve any action which the Community 1 Redevelopment Agency·CRA' l.. ... mayt~·i take\ ~'"" to effectuate a'swap of $1 million Urban MAR O1 2006 (~.; '.,, \ ~ L ,,., ...,f\.., ,...... HOUSING, COMMUNITY & ECONOMIC DEVELOPMENT RECEIVED GJTY CLERK'S OFFICE

2(06 FEB ?8 AM 9: 36

BY ~K- ~- 'EPUTY

' i

]' -· • Development Action Grant (UDAG) for $1 million in CRA Discretionary Funds currently allocated by the CRA to UDAG-eligible projects as a reimbursement to the Single Family Developer for reimbursement ofland acquisition costs associated with the Marlton Square Project; and authorize 'the Chief Executive Officer, CRA, or designees, to ·negotiate and execute grant agreements for the use of said funds for this purpose, subject' to the CRA providing to the City a guaranty relative to the use of such funds, and further subject to the approval of the City Attorney as to form and legality.

The September 6, 2006 action of the City Council fully authorized the Ag~ncyto the take the actions which they are now requesting with respect to the "swap" of UDAG funds. As such, we are recommending.that the recommendation No. 2 of the Agency's February 2, 2006 transmittal be Noted 311d Filed.

Recommendations: That the City Council take the following actions: 1. Note and File Reco!Il-mendation No. 2 ofthe Agency's February 2, 2006 transmittal relative to:the swap of $1.0 million in UDAG funds for: an equal amourit of Agency discretionary revenue, inasmuch as, the City Council previous authorized the requested actions under C.F. No. 01-2069~S4; and, 2. Authorize the Actin·g Chief Executive Officer, or designee, to iricrease the Purchase Order with the law firm of Goldfarb & Lipman by $83,000 from $300,000 to $383,000 for various legal s~rvic~s including the amendmept preparation of three implementation Agreements p.eeded ·for the Marlton Square Single Family Housing development, the Condominium Housing deyelopment and the Retail Center.

Fisc~l Impact: There is no General F1;md impact. The requested actions simply exchange funding sources between work objections to_ reflect the character of the funds.

GM:PS:ps O:\HCED_ CD8_ Marlton_Swap_ UDAG _ 1.wpd

~ .. . ' Community Redevelopment Agency • of the CITY OF LOS ANGELES

DATE, FEB O2 200S

FILE CODE/

4401 South Crenshaw Boulevard / Suite 201 T 323 290 2800 / F 323 295 4 790 Los Angeles / California 90043 www.crala.org

CRA File No. 4885 Council District: §. Contact Person: Al Jenkins (213) 977-1795 Honorable Council of the City of Los Angeles John Ferraro Council Chamber 200 N. Spring Street Room 340, City Hall Los Angeles, CA 90012

Attention: John White, Office of the City Clerk

COUNCIL TRANSMITTAL: Transmitted herewith, is a Board Memorandum adopted by the Agency Board on February 2, 2006, for City Council review and approval in accordance with the "Community Redevelopment Agency Oversight Ordinance" entitled:

VARIOUS ACTIONS RELATED TO:

AUTHORIZATION TO (1) AMEND THE FY06 BUDGET TO TRANSFER 1.0 MILLION OF AGENCY SPECIAL REVENUE FUNDS FROM THE REDEVELOPMENT PLAN AMENDMENT OBJECTIVE (ST6650) TO THE MARLTON SQUARE MIXED-USE DEVELOPMENT OBJECTIVE (CR2140) IN EXCHANGE FOR 1.0 MILLION IN UDAG FUNDS ORGINALLY ALLOCATED FOR MARLTON SQUARE, AND (2) TO INCREASE WORK ORDER WITH GOLDFARB & LIPMAN IN THE AMOU~T OF $83,000, FROM $300,000 TO $383,000, FOR TRANSACTIONAL LEGAL SERVICES RELATED TO THE MARLTON SQUARE MIXED-USE DEVELOPMENT.

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

ENVIRONMENTAL REVIEW The Agency adopted a Mitigated Negative Declaration ("MND") for Marlton Square Project on August 1, 2002, pursuant to the California Environmental Quality Act. The Agency approved an Addendum to the MND on August 19, 2004.

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

1ch rd L. Benbow, Acting Chief Executive Officer ; ·1 ~ ~ iu\lo ft.S HOUSING, COMMUNITY & ~ ECONOMIC DEVELOPMENT ~-- B'<~

• • •

cc: John White, Office of the City Clerk (Original & 7 copies on 3-hole punch) Lisa Johnson, Nancy Duong, Office of the CAO Paul Smith, lvania Sobalvarro, Office of the CLA Adriana Martinez, Office of the Mayor Neil Blumenkopf, Office of the City Attorney •

Bee: Richard L. Benbow Ras Mallari Alma Acosta Nenita Tan, Office of the City Controller Records (2 copies) •I . THE COMMUNITY. REDEVELOPMENT.AGENCY- . OF .THE CITY OF LOS I ANGELES, CA · MEMORANDUM i 7

DATE: FEBRUARY 2, 2006 CR2140 ST6650 TO: AGENCY COMMISSIONERS

FROM: RICHARD L. BENBOW,• ACTING CHIEF EXECUTIVE- OFFICERI . I RESPONSIBLE I . ' PARTIES: ·RICARDO N0(;3UERA, REGIONAL ADMINSTRATOR .I ALVIN JENKINS, PROJECT MANAGER

SUBJECT:. 'AUTHORIZATIO_N TO: ;(1) AMEND THE FY06 BUDGET TO TRANSFER $1.0 ' MILLION- OF AGENCY SPECIAL_ REVENUE I FUNDS FROM THE REDEVELOPMENT PLAN AMENDMENT OBJECTIVE (ST6650) TO THE MARLTON SQUARE MIXED-USE DEVELOPMENT',OBJECTIVE-(CR2140) IN EXCHANGE FOR $1.0 MILLION IN UDAG FUNDS ORIGINALLY ALLOCATED • I FOR MARL TON SQUARE, AND (2) TO INCREASE WORK ORDER WITH . GOLDFARB &' LIPMAN IN THE AMOUNT OF $83,000, FROM'$300,000 TO $~83,000, FOR TRANSACTIONAL LEGAL SERVICES RELATED ·TO THE MARLTON SQUARE MIXED~USE DEVELOPMENT IN THE AMENDED CRENSHAW REDEVELOPMENT PROJECT AREA I SOUTl-;ILOS.ANGELES REGION (CD8) · I

' I RECOMMENDATIONS

That the Agency authorize the Acting Chief Executive Officer or designee to amend the FY06 Budget to: . ,' I 1. Transfer,$1.0 million fr9m the Redevelopment Plan Amendments 1objective (ST6650) to·the Marlton Square Mixed-Use Development objective (CR2140) to replac~ the previously allocated $1.0· million in UDAG funds that was .recently determined to be ineligible for the ', intended residential portion of the Marlton Square:development,.and

That the Ag~n·cy, subject t; ~ayor's Office and City Council review ahd approval, authorize the Acting Chief ,Executive Officer or designee to: ~1

l ' . 2. Authorize the negotiatlon and execution of a UDAG Agreement between the Agency and the j .J " City to provide an eligible economic development activity, proposed to be the _Redevelopment .. Plan Amendments objective (ST6650), to replace the above $1.0 million in Agency Special Revenue funds transfer to the Marlton Square Mixed-Use Development objective (CR2140) above, · I · I

----~-; - - .. ··, ., ...... ~ • i'' t ... AUTHORIZATION Tp~END FY 06 BUDGET TO TRANSFER FUNDS 2

·3. 'A~end the FY06 Budget to reflect the "receipt of $lo million in UDAG f_unds into'the· Redevelopment Plan Amendments objective (ST6650), after execution of UDAG Agreement, and

4. Increase the Purchase Order with the law firm of Goldfarb & Lipman by $83,000, ···~ from $300,000 to $383;000, for various legal services incluqing ·the amendment preparation of· three Implementation Agreements neede,d for the Marlton Square ,Single Family Hou~ing dev·elopm~nt, the Condominium Ho!Jsing development, and the Retail Center.

SUMMARY. , _ ..

The Mar!ton Square Mixed-Use Project ("Project") will be located on property' that is bounded by Martin Luther King Jr. Bouleyard on·the north,· Marlt9n Avenue on the east, .• Santa ~osalia Drive on the south· and Buckingham. Road on the west ("Site"). A drawing of the Site is (Attachment "A" hereto). The Site contains'. 21.8_ acres.-and will be owned and developed by the Prqject's developers. The Pr9ject consists pf three components: (i) the Single Family Housin·g Development; (ii) the. Condon;iinium H9using Development; and '(iii)· the Retail Center. The Site was previously the· former Santa Barbara F;'laza .. , which had fallen into disrepair (Attachment "B"· hereto). · ,, ·The Master "Developer, Marlton ,Square Associates, and the Lee Group, Inc., which .controls the Single-Family and Condominium Developer, recently formed M~·Acql;Jisition Company,L~C·to ,purchase the property at Marlton Square. This entity was formed for financing purposes and .to facilitate the investmentof.approximately $10 million in private mezzanine fin~mcing by Gen~sis Workforce Homes. Fund LLC. J;\fter execution of the required assignment documents and the Dev~loper has met the various "Agency funding drawdown requirements, 'the Agency will forward the previously .approved funds (inclu'di_ng the above $1.8 million in Agency Special Revenue funds) to MS Acquisition Co"mpany LLC. . " • . · : ' I • I "UDAG Funds ' i ·• • 'under the terms of the Single Family Implementation Agreement ("SFIA"), which was ' approved by the, Board on April 21, 2005, the ,Agency is obligated. to provide the·Single ,, "Family .Housing Developer with $7.0 million in Project financial assistance to fa9ilitate the development·of 140 single·faJ11ily, mark~t rate housing units.on_ 8.7 acre~·of the Site. At the time '.of Board approyal of the SFIA, the source,,of ·t~is Jinancial assistance was to ,, come from $1.0 million. in Urban Development·Action Grant (UDAG) funds, and $6.0 ,,. million from .. Fannie Mae, which has since been replaced by·Capital Pas;ific Bank funds. Since that time, it was determined that the UDAG funds could not be.used for the Single Family Housing Development. At the Augu.st 17, 2005 HC&ED Committee meeting, this UDAG funding · restriction was discussed and the Committee, forwarded these ,.. recommendations to City Councll, ackrowledging that the UDAG designation for the Project would need to be resolved before City Council approval. At .the September 6, 2005 City Council meeting, the Motion introduced, by Co,uncilman Bernard Parks was passed, which amended a HC&ED.Report recommendation as.follows: • '

"That the Council authorize and approve any' action which the .:cRA may take to · effectuate 'a swap of $1 million UDAG for $1 million in CRA Qiscretionary Funds • I . . • I

AUTHORIZATION• ;fO• AMEND FY 06 BUDGET TO• TRANSFE~NDS• 3

I , currently ,aliocated by the ~~A to UDAG-eligible projects as a Ireimbursement to the Single Fam.ily Devel.aper .fqr land acquisition costs associated with the Marlton Square 1 Project; and authori~e the Chief Executive Officer, CRA, or designees, to negotiate and execute grant agreements for the use of said funds for this purpose, subject to the CRA providing tcf !he City a guaranty relative to ·the use of such funds( and further subject to the approval of.the_City Attorney as to form and legality."

' The above Agency recommendations are·for the purpose of effecfuating the exchange of Agency Special Revenue funds and the UDAG funds by executing a UDAG Agreement 1 to.meet the Economic Development use requirements. · • ·

The Additional Legal Services

With the Project moving into its implementation phase, the Agency's outside legal counsel (Goldfarb & Lipman) will need to provide· additional transactional legal services. These services include the preparation of a FirsfAmendment to the SFIA, Tax Increment Guarantee, ·escrow agre!3ment for disbursement of Agency fund's, legal review and· interpretation .of the other three Implementation Agreements, a11d miscellaneous legal services rE;Jlated" to the· Project's acquisition, relocation and the Idevelopment · phases. The speci,fics are as follqws: · ~ , ' I First; the SFIA requires amendment due to a change in the metho'd by which the.Agency will _provide funds 'to the Single Family Housing developer. ~he un-amended.SFIA co.ntemplates an interestonly loan from Fannie Mae. The amended SFIA will .provide a bridge loan to the developer to be obtained by the :Agency fro~ a private bank. The bridge loan is su'2_star:itially c;lifferent from the ·Fannie Mae fin~ncing, thus requiring revisions to the Single Family Housing developer's repayment oqligation and·developer guaranty. In addition, a T?X Increment Developer's Guarantee is needed as a part of the SFIA with the preparation of an escrow disbursement agreement Jo transfer Agency funds to the Project'~ maste·r developer. ~r i:...,,,. Second, the Project's m~ster developer and Single Family Housi_ng developer intend to assign their. interests to new ownership entities: Accordingly, legal review of the proposed new.ownerships (and the,as.signments to them) is necessary: Also·, due to the ' . .; . ~ complexity of this·transaction, several implementation issues havE1 arisen, which need to .be' resolved and documented over the next six to nine months. There are related legal , services needed including ·revised acquisition and purchase contr;acts for future Agency .disbyrsals to.the riew ownership entities. • 1

Third, Goldfarb· & Lipman is needed to draft a "First Amendment'i to the Retail· lmpleme!ltation Agreement to allow a quicker drawdown of,City Section 108 funds, and . possible good faith deposit drawdown agreement with the Master Developer to cover unexpected acquisitionand.relocation.costs, to be replenished.by Developer.

Lastly, Goldfarb & Lipm~m is needed for supplemen,ary legal services including on-going meetings with Agency ~taff, .developer attorneys and City Departments (as needed) to ad.dress legal issues of the three Project· components. To allow an uninterrupted flow of legal services, it is . necessary·· to ·allocate budget contingency for unexpected implementation reeds and delayed implementation processes :that trigger additional legal services that need to be allocated for.

! . - ' .111 • AUTHORIZATION Td lt1END FY 06.BUDGET-fo TRANSF~RFUNDS' 4

It .is estimated that approximatery $83,000 will be needed for· these additional legal services, including an outstanding balance of approximately $10,000.

The Nine Years of Legal Services ,, ·' For the last nine _years, the transactional legal services for this .Project -have been provided by Goldfarb & Lip!T)an. During this period;'this firm has operated under a series of Purchase ·Orders which starte9 with: -fegal services for a , previous developer's transaction who sought to redevelop Santa Barbara Plaza only. In. recent years, these , legal services shifted !o tt:)e Agency's. transaction with the current· devE?lopm~nt team headed by Capital Vision Equities, whic.h seeks to redevelop the Site through th€3 three project component developer.5. Goldfarb·- & Lipman's services have ·_been. essential for the: (i) negotiation and preparation of. th.e Marlton Square Master Agreement (with Capital Vision Equities) executed on October 15, 2003; and (ii). three lmplementatiop Agreements that stemmed from the Master Agreement, and relate to the single family, retail, and condominium components of the Project .. The City .Council approved and

modifiedJhese three lmplem~ntation Agreements on· October.?2, 2004. · · L .. Duer;to the: lorig predevelopment period of the Project, many changes ,to its; dea,I structure,' financing, and ownership interests h_ave occyrred. .The Goldfarb & L:.ipman Purchase Order has been amended twice during this Icing period. On November 20, 2003, th~ Agency, followed by City Council;. authorized a budget increase of'$90,000, from its original .amount of $150,000, to $240,000. ~ Qn 'April 2J, 2005, a second budgef increase of $60,000 was authorized to pay for work on the. described Implementation , Agreements (including payment of an outstanding balance of approximately $33;ooo for ·initial work done, and $27,0,00 to complete'the work). ·Since that time,. various Project modifications and unforeseen delays require the additional,. legal· services (described above) in order that the.Project proceed forward in a timely mal")ner. · , · ,..

RE:

0 September. 6, .2005 - City· Council ,apprm,~I of Agency·~ April 21, 20Q5 action and recognition that the $1.0 million ·in UDAG funds for Marlton Square would. need to. be replac_!:!.d with other Agency Di~cretionary funds to me~t the _UDAG requirements. City Col}r;icil also authorized Agency ,CEO to effectuate the f~nds transfers as ne.eded: ·~.

"II ! April 21, 2005 - Board Approval of ·single·· Family Implementation Agre~ment (SFIA) which obligated the t,gency to provide the Marlton Square.Developer'with $7.0 million in · financial assistance, including a·$6.0 million Agency Bridge·Loan utilizing Future Bunker

Hill Program Income and $1.0.. million in Urban Development,.. Action Grant,, (UDAG). fur:,ds. ., ,• . . . ,April. 21, 2005 - Authorization to "Amend Contract by $60,QOO, from $2AO,OOQ to $300,000, for Marlton ~quare Implementation Legal Servic~s

SOURCE OF FUNDS J GRA Special Revenue r U~ban Development Action Grant (UDAG) Bunker Hill Program Income

··,

... . . I ,,. ' .. AUTHORIZATION TO AMEND FY 06BUDGET TO TRANSFERTLJNDS 5 I

PROGRAM AND'BUDGETIMPACT.

ApP.rova1·of this action· will amend the· FY06,budget by transferring $1.0 million from the . Redevelopm·ent Plan. Amendment objective- (ST6650) to the Marlton Square Mixed-Use DeveloP.ment. In exchange, $1.q·· million of UDAG funds will be transferred from Marlton Squa~e objective (CR2140) to the·Redevelopment Plan Amendment objective (ST6650) to replace the ·Agency Special' Revenue fund~, subject' to Mayor's Office and City Council approval and execution of an amended UDAG agreement'. '

ENVIRONMENTAL REVIEW

' I The Agency .adopted a Mitigated Negative Declaration ("MND") for the Marlton Square Project on August ~, 2002, pursuant to the. California· Environmental Quality Act. The ' ., I

Agency approved an Adde11dum to the MND on August 19, 2004. 1 ' I

BACKGROUND

' I The 21.8 acre.Santa aarbara. Plaza shopping area, which is bordered by Martin Luther King Jr. Boulevard on the north,. Marltqn 'Avenue on ~he east, Santa Rosalia Drive on the 1 south and Buckingham. Road on the west, has ·become dilapi,date~ and fallen into disrepair. The proposed Project will be located on the SaQta Barbara Plaza· site, which

• H includ.es thet previously approved Buckingham Place Low-lncplJle Senior ·Housing 9evelopment on 2.6 acr~s of the site, which is currently under construction. The recommendations in this Memorandum pertain -to 19.2 acres of that Site. and do not include the Senior Housing development. I

Marlton ·Square will be a modern, mixed-use development, which will consist of a combination of retail and 'residential uses on the site. Specifically, the development comppnents are proposed to include 140 units of single fc~mily detached homes, 150 condominium units·iin a single structure, and 119,000 square feet of retail space with code required parking. Total development costs will be $169.2 million. The center will prqvide approximately 330 permanent jobs as wel! as employ another 200 people during construction. l

On. August 21, 2004, the Agency r~commended approval of the Implementation Agre~ments for ,the Marlton Square Mixed-Use Development, subject to City Council approval. On October. 22,."2004, the City Council gave its approval. Since that time, the . .. r [ Agreements have been c_ompleted and executed by the Marlton Square Developers. The effective date of the Agreements was September 15, 2005 foll9wing the Developer's obtaining its. bridge loan allowing the commencement of the Devel0Rer's acquisition and. 1 relocation of the properties in Santa Barbara Plaza for the development of the 'Marlton Square development. ~

Acq Liisition and relocation activities have started with those properties needed· for the development of the single-family and condominium portions of the development. Upon I • the .,Developer's acquisition of 100% of the ,single family properties and 80% of the overall Marlton Square site for·all three development phases, the Developer will be able to draw down the Agency's $7.0 million' funding commitment :($1.0 million Agency Discretionary Funds, formerly UDAG funds, and $6.0 Agency Bridge Loan) for the ~ I ~ ) . '' AUTHORIZATIO~ TO~END.. 'FY 06 BUDGET TO TRANSFER:FUNQS•.

SJngle-Family Development, in accordance wijh \he Single-FarT)jly. 'ln:iplementatiqn" Agreement (SF.IA). Jhe Developer~s acquisition of the properties that.will be.needed for the retail portion of the.development will fqUow.shortly thereafter. .. Goldfarb & Lipman has been providing legal :services for ·the Marlton Square development .. since 1997 (initially with • a different developer). ~oldfarb & Lipman completed the'Marltqn Square Master'Agreemer:it, which _was,approved·by the Agency on April 17, 2003 and by City Council on June 27, 20Q3. ~ ., •·

The, S9nta Barbara Plaza site has. been the primary focus of the Amended Cren.shaw Redevelopment Plan that was adopted in, 1994. · · • . ~·

" .

- • I - iRicha ,· !3enbow / ( Acti!Jg hie{ Executive O ·cer ,___./ T.here· is no conflict>of interest known to me, whis;.h exists,with regqrd to any AgencY, 1 officer or: emplc;,yee. concerning tt:iis action. • '· Attachment A -:- Location Map ,, ·· A,ttachment B -Mar,lton Square Illustrative Site P,lan .~

. ,'

'} ......

' '

.,.~ I

-,'

. ' A TT AC HMENT 11 A11

. . Cr•ll5-'IPI' lrt Atn111d11r.t Ill RfftvtlapilltM ProtortAtH

Ongna: Cranlllaw • RldllYUp,llle.tt PraffflAtU ; l

I '( I ,/"#

.. .,

- ~~ .~J

·•.iuckingha~ Place,-/ H · Senior Housing Project Site ' ... '

-· ~-4.. .•.: ._...... · .it • - ...... i ...... ' .. '--· •NORTH

•.

-· SANTA BARBARA PLAZA ,

I i ,'·

-I ,. . . I SIIOP 2 , .,.sno SF .

SHOP6 1 · 4~~0SF i

•

)> M~-.P.LTO"i SQUA~~. ! i. lll~JSTRATIVE SITE PLAN · OPHON.·A ,. -I -I )> () :c ~ m z -I

0, FORMCC54(REV9/2005) RETURN TO: LOS ANGELES CITY RECORDS CENTER 555 RAMIREZ STREET, SPACE 320 LOS ANGELES, CA, 90012 CITY MAIL STOP 161 (213) 485-3510 RECORDS WITHDRAWL SLIP 2 DO NOT REMOVE Place in Storage Location RECORDS CHECKED OUT TO: 01/05/2011 CAROL PETERS CITY CLERK/CPS 200 N. SPRING ST., 395 (213) 978-1047 Mail Stop: 160

! BOX INFORMATION: Box#: 709524 /CLK/01.17.0' B-2828 0010. From: To:

%00709524

RECORD INFORMATION: Service Request#: 21171 , Record: 55504 Record ID: 0010. 000789 COUNCIL FILE 01-2069 55 $00055504 1111111111111111111111111111111111111 IIIII 1111111111111 SR Status: F Returned: